British Pound Short-term Outlook: GBP/USD Rebound Challenges Bear Trend

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

GBP/USD rebounded from a major support zone after falling more than 2% from the June high.
The recovery is testing initial resistance with weekly range taking shape just below- broader downtrend remains intact for now.
A break above near-term resistance would strengthen the case for a larger recovery.
Break below support would threaten another leg lower toward key downside targets.
Resistance 1.3465/74 (key), 1.3522, 1.3572/93- Support ~1.3422, 1.3350 (key), 1.3266

GBP/USD is attempting to recover after defending a major support confluence near the yearly low. The rebound has eased immediate downside pressure, but Sterling remains trapped within a broader bearish structure following the sharp plunge from the June highs. With the weekly range now taking shape and key economic data on tap later this week, traders are watching to see whether buyers can build on the recovery or if the broader downtrend reasserts itself. 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 my last British Pound Short-term Outlook, we noted that GBP/USD was trading just below, “pivotal resistance at the yearly open with the weekly and monthly opening ranges now taking shape. Look for the breakout to offer guidance in the days ahead. From a trading standpoint, losses would need to be limited to 1.3350 IF price is heading higher on this stretch…” Sterling broke lower three-days later before rebounding off the May lows- a retest of resistance failed last week with a break below the monthly range lows fueling a decline of more than 2.3% off the June high.

GBP/USD rebounded off support confluent support on Friday at the yearly low close and the 38.2% retracement of the 2025 advance at 1.3187/94. Note that the lower parallel converges on this threshold and further highlights the technical significance of this zone near-term. The focus is on a reaction off this mark with the broader outlook still weighted to the downside while below the median line.

British Pound Price Chart – GBP/USD 120min

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

Notes: A closer look at Sterling price action shows GBP/USD rebounding off slope support last week with the recovery testing initial resistance today at the 25% parallel / 78.6% retracement of the March advance near 1.3266. The weekly range is taking shape below this level, and the focus is on a breakout in the days ahead. A topside breach exposes the May low and the May low close at 1.3302/26- note that the median-line converges on this region into the close of the week, and a breach above would suggest a more significant low is in place. Subsequent resistance is eyed with the 200-day moving average (currently ~1.3421) with broader bearish invalidation steady at the yearly open at 1.3437.

A break lower from here still must contend with a key pivot zone at 1.3140/54- a region defined by the 2025 May & August lows and the 100% extension of the May decline. Losses below this threshold would threaten another bout of accelerated declines with the next major technical consideration seen at the 2024 July high and the September low-day close (LDC) at 1.3045 and the November LDC at 1.3021.

Bottom line: Sterling has rebounded off confluent downtrend support with the recovery testing initial slope resistance today. The weekly opening range is taking shape, and the focus is on a breakout for guidance. From a trading standpoint, rallies would need to be limited to 1.3326 IF price is heading lower on this stretch with a close below 1.3187 needed to fuel the next leg of the decline.

Looking ahead, the focus shifts to the release of the UK Manufacturing and Services PMIs tomorrow, followed by Thursday's highly anticipated U.S. Personal Consumption Expenditures (PCE) report—the Fed's preferred measure of inflation. After Chair Warsh reaffirmed the Fed's commitment to returning inflation to its 2% target, the PCE data could play a pivotal role in shaping expectations for the policy outlook. Interest rate markets are currently pricing in a 74% probability of a 25-basis-point rate hike in September. Stay nimble into the releases and watch the weekly close for directional 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, 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.