British Pound Forecast: GBP/USD Bulls Defend Yearly Open Support

British Pound Technical Forecast: GBP/USD Weekly Trade Levels

British Pound plunges 2.91% off July / yearly high- set to snap four-week losing steak
GBP/USD rebounds off yearly-open support / August opening-range breakout imminent
Resistance 1.2934, 1.30, 1.3091-1.3156 – Support 1.2731/73, 1.2584/95, 1.2493

The British Pound is poised to snap a four-week losing streak after plunging more than 2.9% off fresh yearly highs. The August opening-range is set just above a key pivot zone we’ve been tracking for weeks now around the 2024 yearly open – looking for a possible breakout to offer guidance with the broader technical outlook still constructive while within the October uptrend. Battle lines drawn on the GBP/USD weekly technical chart.

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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 a, “reversal off fresh yearly highs takes GBP/USD back into support at former resistance- looking for a reaction here with the immediate short-bias vulnerable while above 1.2773.” Price has been testing this support for the past three-weeks with Sterling set to snap a four-week losing streak as of Thursday.

The key support zone in focus now shifts to 1.2731/73- a region defined by the objective 2024 yearly-open and the February 2019 swing low. This level is backed by the 61.8% Fibonacci retracement of the yearly range / 52-week moving average at 1.2584/94- a break / close below this threshold would threaten a larger setback towards the yearly low-week close (LWC) at 1.2494 and broader bullish invalidation at 1.2397-1.2422.

Weekly resistance is eye with the yearly high-week close (HWC) at 1.2934- a breach / weekly close above this threshold is needed to suggest a more significant low was registered last week and keep the focus on a stretch towards the 1.30-handle. Next major resistance hurdles eyed at the 2023 HWC / 100% extension at 1.3091-1.3156 and the 2021 LWC at 1.3273- both levels of interest for possible topside exhaustion IF reached.

Bottom line: The British Pound has been testing a major support pivot at the yearly open for the past three-weeks and the risk remains for possible inflection off this zone. The August opening-range is set, and the immediate focus is on a breakout of the 1.2670-1.2860 range for guidance. From a trading standpoint, losses would need to be limited to 1.2584 IF price is heading higher on this stretch with a close above 1.2934 needed to fuel the next move. 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

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