British Pound Forecast: GBP/USD Tests Resistance Ahead of Fed- Decision Time for Sterling

British Pound Technical Forecast: GBP/USD Weekly Trade Levels

GBP/USD testing resistance with the immediate focus on a breakout of this week’s range as the Fed decision approaches.
A break of this zone would be needed to validate a push toward larger resistance objectives, while failure here risks preserving the broader June downtrend.
Economic docket remains heavy next week with NFPs, CPI and the BoE rate decision on tap
Resistance 1.3372, 1.3453/69 (key), 1.3648- Support 1.3280, 1.3148/54 (key), 1.3080/92

The British Pound is threatening to snap a two-week rally with GBP/USD trading just below downtrend resistance ahead of today’s highly anticipated Fed rate decision. The setup leaves the pair vulnerable to a near-term inflection, with the broader June downtrend remaining intact while below resistance. A breakout here would be needed to clear the path for a larger advance, while failure risks shifting the focus back toward the 52-week moving average. The attention now shifts to the updated Summary of Economic Projections as traders gage the outlook for monetary policy next year. Major event risk extends into next week with key data on tap alongside the Bank of England rate decision. Its decision time for the Sterling bulls and the battle lines are 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 GBP/USD was, “testing support this week and although the broader outlook remains tilted to the downside the immediate focus is on possible inflection off this zone with short-bias vulnerable while above.” The level in focus was 1.3080/92- a region defined by the 100%extesniuon of the June decline and the 2023 high-week close (HWC). Sterling attempted to break this key zone for more than four-weeks before rebounding into the close of the month with the rally extending nearly 2.9% off the November low.

The bulls exhausted into confluent resistance last week at the 2024 HWC at 1.3377- note that the 75% parallel of the descending pitchfork converges on this threshold this week and a breach / weekly close above would be needed to fuel the next leg of this advance towards key resistance at the 61.8% retracement / September HWC at 1.3453/69. Look for a larger reaction there IF reached- strength surpassing this level would suggest a more significant trend reversal is underway with the next major technical consideration eyed at the 2025 HWC at 1.3648.

Initial weekly support now rests with the July low-week close (LWC) at 1.3280 and is backed by a key confluent zone at 1.3149/54. This region is defined by the 61.8% retracement of the November advance, the 52-week moving average, and the median-line. Ultimately a close below the 1.3080 would be needed to mark resumption of the broader June downtrend with subsequent support objectives seen at the March high-week close and the 2024 March high at 1.2894/95.

Bottom line: Sterling is testing resistance this week- risk for inflection off this mark as we head into the Fed rate decision later today. From a trading standpoint, the immediate focus is on a breakout of the 1.3280-1.3372 range for guidance- ultimately, rallies would need to be limited to 1.3469 for the June downtrend to remain viable with a break below the 52-week moving average needed to fuel the next leg of the decline.

Keep in mind the economic docket is loaded next week with November Non-Farm Payrolls and the Consumer Price Index (CPI) on tap out of the US. UK CPI is slated for Wednesday with the Bank of England on Thursday- the committee remains divided on the path for interest rates after the 5-4 vote to hold last month, and the release has the potential to fuel substantial Sterling volatility next week. Stay nimble into these 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, Senior Technical Strategist

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.