British Pound Short-term Outlook: GBP/USD Facing Support– Risk Mounts

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

British Pound approaches monthly support as the October opening range takes shape
GBP/USD remains under pressure with downside momentum building- limited event risk this week
Resistance 1.3478/90, 1.3572/87, 1.3626/40- Support 1.3365/71, 1.3267/80 (key), 1.3207

The British Pound is approaching key support at monthly lows as the October opening range begins to take shape. The recent pullback in GBP/USD keeps focus on a pivotal zone just above the median-line, where a close below would risk fueling the next leg lower. 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 trading below resistance at the August highs and that “losses would need to be limited to the June lows IF price is heading higher on this stretch with a close above the monthly swing highs needed to mark uptrend resumption.” Sterling broke higher three-days later with the rally exhausting on September 17^th (Fed-day) at 1.3727 before reversing sharply lower. Price is now trading within the confines of a proposed descending pitchfork extending off the mid-June highs with the recent recovery failing this week at the 75% parallel.

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 trading within an embedded descending channel off the September high. Price is now approaching initial support at the 61.8% retracement of the August rally / June swing low at 1.3365/70- looking for a possible reaction off this mark in the days ahead. A break / close below would threaten downtrend resumption with subsequent support objectives seen at the 78.6% retracement / August low-day close (LDC) at 1.3267/80 and the July low-close at 1.3207. Key support rests at 1.3125/43- a region defined by the 100% extension of the September decline and the 38.2% retracement of the yearly range (area of interest for possible exhaustion / price inflection IF reached).

Initial resistance is eyed with the weekly open / opening-range high at 1.3479/90- a topside breach / close above this threshold would be needed to shift the focus back towards the upper parallel with subsequent resistance objectives seen at the 61.8% retracement of the September decline / July swing high at 1.3572/87 and bearish invalidation at the September high-day close (HDC) / 78.6% retracement at 1.3625/40.

Bottom line: The British Pound is carving the October opening-range just below downtrend resistance – look for a breakout in the days ahead for guidance here. From a trading standpoint, rallies should be limited to 1.3587 IF price is heading lower on this stretch with a close below the median-line needed to suggest a more significant high is in place / fuel the next leg lower price.

Keep in mind that US / UK data is light this week and traders will be closely monitoring negotiations regarding the ongoing government shutdown. 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

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.