British Pound Forecast: GBP/USD Resistance Intact Ahead of Fed/BoE
British Pound is trading into resistance with the December opening-range intact ahead of the Fed / BoE. Battle lines drawn on the GBP/USD weekly technical chart.
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British Pound Technical Forecast: GBP/USD Weekly Trade Levels
- British Pound rebounds into pivotal resistance ahead of Fed, BoE, key inflation data
- GBP/USD December opening-range intact- breakout imminent
- Resistance 1.2731/87, 1.2849 (key), 1.3045- Support 1.2494-1.2542 (key), 1.2367/97, 1.2237
The British Pound is carving a well-defined range just below resistance ahead of FOMC and BoE interest rate decisions. The focus is on a breakout in the days ahead with the broader threat still weighted to the downside after last month’s breakdown. 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 breakdown was testing the, “first major pivot zone with the eight-week sell-off vulnerable into the 2024 low-week close- risk for some inflection here. From a trading standpoint, a good zone to reduce portions of short-exposure / lower protective stops- rallies should be limited to the yearly moving average (1.2783) IF price is heading lower on this stretch with a close below 1.2493 needed to fuel the next leg of the decline.” Sterling held support that week with a 2.6% rally off the lows faltering into the yearly moving average early in the month. The December opening-range is intact just below and the focus is on a breakout in the days ahead.
Weekly resistance is eyed at 1.2731/87-a region defined by the 2024 yearly open, the 61.8% retracement, the February 2019 low and the 52-week moving average. Note that a basic 38.2% retracement of the September decline converges on former slope support just higher at 1.2849 and a breach / close above this threshold would be needed to suggest a more significant low is in place / a larger trend reversal is underway (bearish invalidation).
Weekly support remains with the 2024 low-week close / 78.6% retracement at 1.2494-1.2542 and is backed by the April low-close / 2023 January high-week close (HWC) / May LWC at 1.2367/97. A break / close below this threshold is needed to fuel the next major leg of the decline towards the October LWC at 1.2237 and 2023 open / 2023 LWC at 1.2084-1.2113- both levels of interest for possible downside exhaustion / price inflection IF reached.
Bottom line: The Sterling recovery is trading into resistance at a major pivot zone with the monthly opening-range preserved just below. From a trading standpoint, the immediate focus is on a breakout of the monthly range with the broader outlook still weighted to the downside while below 1.2850.
Keep in mind we get the release of key UK inflation data and the FOMC interest rate decision tomorrow with the Bank of England and US inflation on tap into the close of the 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.
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--- Written by Michael Boutros, Sr Technical Strategist with FOREX.com
Follow Michael on X @MBForex
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