British Pound Forecast: GBP/USD Battlelines Drawn at Key Pivot Zone

British Pound Technical Forecast: GBP/USD Weekly Trade Levels

British Pound trading into major pivot-zone post-BoE - poised for February breakout
GBP/USD bears vulnerable above weekly low- U.S. Non-Farm Payrolls on tap
Resistance 1.2494 (key), 1.2609, 1.2731/73- Support 1.2272, 1.2084-1.2114 (key), 1.1841/89

The British Pound is poised for a breakout in the days ahead with GBP/USD trading into a key pivot-zone on the heels of today’s Bank of England interest rate cut. The focus is on possible price inflection off this zone in the days ahead with U.S. Non-Farm Payrolls on tap tomorrow. Battle lines drawn on the GBP/USD weekly technical chart.

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

British Pound Price Chart – GBP/USD Weekly

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

Technical Outlook: In last month’s British Pound Weekly Forecast we noted that, “A four-month sell-off takes GBP/USD into pivotal support – risk for possible inflection off this zone. From a trading standpoint, a good region to reduce short-positioning / lower protective stops- rallies should be limited to 1.2397 IF price is heading lower on this stretch…” Sterling reversed sharply higher the following week with a pivot above the 1.24-handle extending into channel resistance this week.

The immediate focus is on this week’s close with respect to the 1.2367-1.2397 pivot zone- a region defined by the April low-close, and the 2023 January high-week close (HWC) / May low-week close (LWC). A look at the line-chart below illustrates the magnitude of the price inflections off this zone over the past two-years – looking for a reaction here early in the month.

British Pound Price Chart – GBP/USD Weekly

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

Weekly resistance remains with the 2024 LWC at 1.2494 with a close above the September channel needed to suggest a more significant low was registered last month / a larger reversal is underway. Subsequent resistance objective eyed at the 38.2% retracement at 1.2609 and the 2024 yearly open / 55-week moving average / February 2019 low at 1.2731/73- look for a larger reaction there IF reached.

A close below this pivot zone would once again expose the 61.8% retracement at 1.2272 with key support unchanged at the 2023 yearly open / 2023 LWC at 1.2084-1.2114. A break / close below this threshold is needed to mark downtrend resumption towards the January 2024 low / 50% retracement of the 2022 advance at 1.1841/89.

Bottom line: Sterling is trading into a major pivot zone- looking for possible price inflection off the 1.2367-1.2397 range. From a trading standpoint, losses would need to be limited to this week’s low IF price is heading for a breakout on this stretch with a close above channel resistance needed to clear the way for a larger advance.

Keep in mind we get the release of US Non-Farm Payrolls tomorrow with key inflation data on tap next week. Stay nimble into the releases and watch the weekly closes here for guidance. Review my latest British Pound Short-term Outlook for a closer look at the near-term GBP/USD technical trade levels.

GBP/USD Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

Active Weekly Technical Charts

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

Follow Michael on X @MBForex

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

FOREX.com is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment and CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.forex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.forex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 42.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.

Delayed London Stock Exchange (LSE) Data

The London Stock Exchange (LSE) market data displayed or referenced on this website is provided on a delayed basis and is not in real time. The delay period may vary but is typically at least 15 minutes. This data is intended for information purposes only and should not be relied upon for trading, investment, or other financial decisions. We do not guarantee the completeness, reliability, or suitability of the data for any particular purpose. Users should consult real-time data sources and obtain professional advice before making any financial decisions.