British Pound Forecast: GBP/USD Plunges to Make-or-Break Support

British Pound Technical Forecast: GBP/USD Weekly Trade Levels

British Pound rally falters at multi-year highs- three-week plunge now testing yearly uptrend
GBP/USD risk for price inflection ahead- UK employment, US retail sales, consumer sentiment on tap
Resistance 1.3648, 1.3749 (key), 1.4003- Support 1.3372/90, 1.3269 (key), 1.3091-1.3143

Sterling is poised to mark a third consecutive weekly decline after turning from resistance at multi-year highs. The decline takes price into critical support at the yearly trendline- this is a make-or-break level for the bulls. 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 breakout was testing, “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.” Sterling failed at resistance that week with price plunging more than 3% off the yearly high.

GBP/USD is testing confluent support today at 1.3372/90- a region defined by the 2024 high-week close (HWC) and the 23.6% retracement of the yearly range. Looking for a reaction off this mark with a weekly close below the April HWC / median-line at 1.3270 ultimately needed to suggest a more significant high is in place / invalidate the yearly uptrend. Subsequent support rests with the 2023 HWC / 38.2% retracement at 1.3091-1.3143 and the 52-week moving average, currently near ~1.2980.

Weekly resistance now eyed at the yearly high-week reversal close at 1.3648 with a breach / close above the 2022 high at 1.3749 still needed to mark resumption of the broader Sterling up trend. Subsequent resistance objectives eyed at the 61.8% extension of the 2022 advance at 1.4003 and the 2021 HWC at 1.4158.

Bottom line: Sterling is attempting to break below the yearly uptrend and the focus is on the weekly close with respect to 1.3372/90- risk for price inflection here. From a trading standpoint, a good zone to reduce portions of short-exposure / lower protective stops- rallies should be limited to 1.3648 IF price is heading lower on this stretch with a close below 1.3270 needed to suggest a reversal is underway.

Keep in mind we get the release of key UK employment and US retail sales tomorrow with the University of Michigan consumer sentiment surveys on tap Friday. Stay nimble into the releases and watch the weekly close 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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