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British Pound Short-term Outlook: GBP/USD in Freefall- Support Ahead

Article By: ,  Sr. Technical Strategist
November 14, 2024 3:03 PM

British Pound Technical Outlook: GBP/USD Short-Term Trade Levels

  • British Pound breaks November opening-range- plummets to multi-month low
  • GBP/USD now off nearly 6% from September / yearly high- major support pivot in view
  • Resistance 1.2731/73, 1.2857-1.29 (key), 1.3000/45- Support 1.2571-1.2613 (key), 1.2423, 1.2337/49

The British Pound is poised to mark a fifth consecutive-daily loss with GBP/USD plunging back below the 200-day moving average. A break of the November opening-range keeps the focus on a late-month low with price now approaching a major support pivot- risk for price inflection ahead. Battle lines drawn on the GBP/USD short-term technical charts.

Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Sterling technical setup and more. Join live on Monday’s at 8:30am EST.

British Pound Price Chart – GBP/USD Daily

Chart Prepared by Michael Boutros, Sr. Technical Strategist; GBP/USD on TradingView

Technical Outlook: In last month’s British Pound Short-term Outlook, we noted that GBP/USD was testing a major pivot zone and that our focus was on a daily, “close with respect to 1.2857. From at trading standpoint, a good zone to reduce short-exposure / lower protective stops- rallies should be limited to the weekly high IF price is heading lower on this stretch with a close below this pivot zone exposing a run towards the yearly open.”

Sterling held this support zone through US elections before finally breaking earlier this week. The decline has already plunged 3.2% off the monthly high with price testing support today at the lower parallel of a newly identified descending pitchfork off the yearly highs. Note that this slope converges on a key support zone just lower at 1.2571-1.2613- a region defined by the 61.8% retracement of the 2023 advance and the June / July swing lows. Risk for downside exhaustion / price inflection into this zone.

British Pound Price Chart – GBP/USD 240min

Chart Prepared by Michael Boutros, Sr. Technical Strategist; GBP/USD on TradingView

Notes: A closer look at Sterling price action shows GBP/USD plummeting into the weekly open with a loss of more than 2.2% responding to slope support today in European trade. Initial resistance is now eyed back at 1.2731/77 with medium-term bearish invalidation now lowered to the March high-day close (HDC) / 38.2% retracement at 1.2857-1.2900. Ultimately, a breach / close above the July high / September low-day close (LDC) at 1.3045 would be needed to put the bulls back in control.

A break below this key pivot zone / 1.2571 would threaten another bout of accelerated declines within subsequent support objectives eyed at the 2022 December HDC at 1.2423 and the October 2023 high / 2024 LDC at 1.2337/49- both levels of interest for possible downside exhaustion / prince inflection.

Bottom line: The GBP/USD breakdown is approaching a major support pivot and while a break of the monthly opening-range keeps the focus lower, the immediate decline may be vulnerable into this zone. From at trading standpoint, look to reduce short-exposure / lower protective stops on a stretch towards the 1.26-handle- rallies should be capped by 1.2773 IF price is heading for a larger breakdown with a close below 1.2571 needed to fuel the next leg of the decline.

Keep in mind we get the release of UK GDP and US retail sales tomorrow with key UK inflation data on tap next week. Stay nimble into the releases and watch the weekly closes for guidance. Review my latest British Pound Weekly Forecast for a closer look at the longer-term GBP/USD technical trade levels.

Key GBP/USD Economic Data Releases

 

Active Short-term Technical Charts

--- Written by Michael Boutros, Sr Technical Strategist with FOREX.com

Follow Michael on X @MBForex

 

 

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