British Pound Technical Price Outlook: GBP/USD Weekly Trade Levels
- Sterling technical trade level update – Weekly Chart
- GBP/USD plummets to fresh yearly lows- risk for inflection into key pivot zone
- Weekly resistance 1.3271, 1.3398, 1.3529 (key) – Support 1.3075(key),~1.2920, 1.2754
The British Pound plummeted more than 4.8% against the US Dollar since the January high with a third weekly plunge taking GBP/USD into a major technical pivot zone. While the broader outlook remains tilted to the downside, the immediate decline may vulnerable into this threshold and we’re looking for possible price inflection in the days ahead. These are the updated targets and invalidation levels that matter on the GBP/USD weekly chart. Review my latest Strategy Webinar for an in-depth breakdown of this Sterling technical setup and more.
British Pound Price Chart – GBP/USD Weekly
Notes: In my January Sterling Technical Forecast our bottom line noted that, “A reversal off downtrend resistance and a break below the January opening-range keeps the focus on near-term support here at the median-line.” We highlighted that, “Weakness beyond his threshold could fuel another accelerated sell-off with the next support objective eyed beyond the 2021 low at the 61.8% extension at 1.3075.” GBP/USD registered a low at 1.3082 on Tuesday, nearly six-weeks later – we’re looking for a reaction / possible inflection here.
Initial weekly resistance now stands back at 1.3245/71– a region defined by the 61.8% Fibonacci retracement of the 2018 decline, the 2020 yearly open and the 2021 low-week close. Note that the median-line also converges on this region over the next few weeks and further highlight the technical significance of this zone. A breach / close above this threshold is needed to alleviate further downside pressure in the Pound with subsequent resistance levels eyed at the January close low at 1.3398 and broader bearish invalidation at the yearly open (1.3529). A break lower from here could fuel another bout of accelerated losses for Cable with such a scenario exposing support objectives at the lower parallel (currently ~1.2920s) and the 2019 yearly open / 2018 low-week close at 1.2754.
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Bottom Line: The Sterling breakdown has reached the first major support pivot and we’re looking for a reaction off this mark for guidance. From a trading standpoint, a good zone to reduce portions of short exposure / lower protective stops – rallies should be capped by the median-line IF price is heading lower on this stretch with a close below 1.3075 needed to fuel the next leg lower in the British Pound. I’ll publish an updated Sterling Price Outlook once we get further clarity on the near-term GBP/USD technical trade levels.
British Pound Trader Sentiment – GBP/USD Price Chart
- A summary of IG Client Sentiment shows traders are net-long GBP/USD – the ratio stands at +2.45 (71% of traders are long) – typically bearish reading
- Long positions are 1.76% lower than yesterday and 23.43% higher from last week
- Short positions are 11.44% higher than yesterday and 33.33% lower from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests GBP/USD prices may continue to fall. Traders are less net-long than yesterday but more net-long from last week. The combination of current positioning and recent changes gives us a further mixed GBP/USD trading bias from a sentiment standpoint.
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Previous Weekly Technical Charts
— Written by Michael Boutros, Technical Currency Strategist with DailyFX
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