British Pound Short-term Outlook: GBP/USD Support Test at September Low
British Pound plunged into October with a decline of more than 3% now testing the first major support hurdle. Battle lines drawn on the GBP/USD technical charts.
Share this:
British Pound Technical Outlook: GBP/USD Short-Term Trade Levels
- British Pound reverses off confluent resistance- plunges 3% off multi-yearly high
- GBP/USD now testing technical support- risk for exhaustion / price inflection
- Resistance 1.3122, ~1.3160s, 1.3260/73 (key)- Support 1.30/44, 1.2927 (key), 1.2857
The British Pound rally stalled into technical resistance last month with GBP/USD plunging more than 2.6% since the start of October. A two-week decline is now testing the first major support pivot near the September lows and the focus is on possible exhaustion / price inflection here in the days ahead. 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 a five-day rally in GBP/USD was, “approaching confluent resistance into the yearly uptrend. From a trading standpoint, look to reduce portions of long-exposure / raise protective stops on a stretch towards 1.3414 – losses should be limited to the median-line IF price is heading higher on this stretch…” Sterling held resistance for five-days before reversing sharply into the October open with break below the median-line fueling a decline of more than 3% off the yearly high.
The pullback is testing pivotal support today at 1.3000/45- a region defined by September swing low, the low-day close (LDC), and the July high. Looking for a possible reaction off this mark today with broader bullish invalidation now raised to the lower parallel / 38.2% retracement of the late-2023 rally at 1.2927- risk for an exhaustion low into this this level.
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 the confines of a proposed descending pitchfork off the August / September highs. Weekly open resistance is eyed at 1.3122 and is backed by the median-line (currently ~1.3160s). Near-term bearish invalidation now stands at 1.3259/73- a region defined by the August high-day close (HDC) and the 2021 low-week close (LWC). A topside breach / close above this threshold would be needed to mark uptrend resumption towards 1.3414 and beyond.
Bottom line: GBP/USD has seen only one daily advance since the start of October with a 3% decline taking price into initial support here at the September lows. From a trading standpoint, a good zone to reduce portions of short-exposure / lower protective stops – losses would need to be limited to the lower parallel / 1.2928 for the April advance to remain viable with a close above 1.3273 needed to mark uptrend resumption. 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
- Australian Dollar Short-term Outlook: AUD/USD Vulnerable Sub-6800
- Canadian Dollar Short-term Outlook: USD/CAD Bulls Charge Ahead of NFP
- Gold Short-term Outlook: XAU/USD Bulls at Major Hurdle Ahead of NFP
- Euro Short-term Technical Outlook: EUR/USD Plunges into October
- US Dollar Short-term Outlook: USD Defends Support at Fresh Yearly Low
--- Written by Michael Boutros, Sr Technical Strategist with FOREX.com
Follow Michael on X @MBForex
Open an account in minutes
Experience award-winning platforms with fast and secure execution, and enjoy tight spreads from 0.5 pts on FX and 0.3 pts on indices.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
USD/JPY Weekly Outlook: AI earnings could overshadow the Fed and BoJ
AI sentiment has become a major driver of US Treasury yields and USD/JPY. With Microsoft, Alphabet and Amazon reporting this week, central bank decisions may have competition for traders' attention.
US Dollar Price Action Setups: EUR/USD, USD/JPY, GBP/USD, USD/CAD
The Dollar is working on its second consecutive red week and while sellers didn’t exactly pounce on fresh lows, there’s an opening door for bears to make a move.
Silver forecast: metals liquidation drags XAG/USD into $50-55 support
Silver has broken its July low and slipped into a long-term support zone as the selling in precious metals deepens. The chart shows where the metal could bottom, and next week's Fed decision may decide whether it does.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.forex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.