British Pound Forecast: GBP/USD Soars to Three-Year Highs
GBP/USD is poised to mark an outside-weekly reversal, with the advance now testing the 2022 highs. Battle lines drawn on the Sterling weekly technical chart into July.
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British Pound Technical Forecast: GBP/USD Weekly Trade Levels
- British Pound poised to mark outside weekly reversal- surges from support at former resistance
- GBP/USD breakout rallies to multi-year highs- PCE, NFPs on tap into monthly cross
- Resistance 1.3749 (key), 1.4003, 1.4158- Support 1.3633, 1.3414, 1.3270 (key)
Sterling has covered the entire monthly range this week with a rally of more than 2.1% breaking through the June range highs. The advance its now testing resistance at the 2022 swing high with major event risk on tap into the monthly cross. 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 the GBP/USD was, “trading at uptrend resistance heading into June and while the broader outlook remains constructive, the January advance may be vulnerable while below this slope. From a trading standpoint, losses should be limited to 1.3240 IF price is heading higher on this stretch with a weekly close above parallel resistance needed to mark trend resumption.” Sterling held slope resistance for more than three-weeks with a defense of support this week attempting to mark an outside-weekly reversal candle. The advance is testing resistance today at the 2022 swing high near 1.3749 and the focus is on the weekly close with respect to this pivot zone.
Initial weekly support now rests with the June opening-range highs near 1.3633 and is backed by the 78.6 % retracement of the 2021 decline at 1.3414. Broader bullish invalidation now raised to the April high-week close (HWC) at 1.3270- losses below this threshold would suggest a more significant high is in place / a larger reversal is underway towards the 2023 HWC at 1.3092.
A breach / weekly close above 1.3749 is needed to keep the immediate advance viable with subsequent resistance objectives eyed at the 61.8% extension of the 2022 advance at 1.4003 and the 2021 HWC at 1.4158- both levels of interest for possible topside exhaustion / price inflection IF reached.
Bottom line: A breakout of the monthly opening-range takes GBP/USD into initial resistance at the 2022 swing highs with weekly momentum pressing into overbought territory today. From at trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops- losses would need to be limited to 1.3632 IF price is heading higher on this stretch with a close above 1.3749 needed to mark uptrend resumption.
Keep in mind we get the release of key US inflation data tomorrow (core PCE) with Non-Farm Payrolls on tap next week into the July open. Stay nimble into the monthly cross 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.
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--- Written by Michael Boutros, Sr Technical Strategist with FOREX.com
Follow Michael on X @MBForex
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