British Pound Short-term Outlook: GBP/USD Bulls Eye Breakout

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

British Pound rally extends to fresh multi-year highs- bulls attempt major breakout
GBP/USD risk for price inflection off this mark into NFPs - weekly close critical
Resistance 1.3593, 1.3705, 1.3816 (key)- Support 1.3434/54 (key), 1.3322, 1.3176

The British Pound surged more than 1% this week with GBP/USD attempting to mark a major breakout early in the month. The immediate focus is on today’s close with U.S. Non-Farm Payrolls on tap into the close of the week. 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, “testing technical resistance again here and while the broader outlook remains constructive, the immediate focus is on a close above this level. From a trading standpoint, losses should be limited to the monthly open IF price is heading for a breakout on this stretch..” Sterling ripped higher the following day with price registering an intraday high at 1.3593 before exhausting into the close of May. A rebound off former resistance is now testing the highs with the weekly / monthly opening-range taking shape just below- we’re on breakout watch.

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 attempting to breach the yearly highs / 75% parallel in early US trade on Thursday. The immediate focus is on today’s close with respect to this threshold.

Initial support rests with the weekly open / 2024 high at 1.3434. Note that the median-line converges on this threshold over the next few days and a break / close below would threaten a larger correction within the broader uptrend towards the 61.8% retracement of the May advance at 1.3313 and bullish invalidation at the May low-day close (LDC) near 1.3176.

A topside breach above the 75% parallel would threaten resumption towards subsequent resistance objectives at the 2022 high-day close (HDC) at 1.3705 and the 100% extension of the January advance at 1.3816- look for a larger reaction there IF reached.

Bottom line: The British Pound is testing confluent resistance at the yearly high and the focus is on a possible price inflection off this pivot zone- watch today’s close. From a trading standpoint, losses should be limited to 1.3434 IF price is heading higher on this stretch with a close above the 1.36 needed to mark uptrend resumption.

Keep in mind we are in the early throws of the June opening-range with U.S. Non-Farm Payrolls slated for tomorrow morning and key inflation data (CPI) on tap next week. Stay nimble into the releases and watch the weekly closes here for 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, Sr Technical Strategist with FOREX.com

Follow Michael on X @MBForex

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