British Pound Forecast: GBP/USD Rally Stalls at Major Resistance

British Pound Technical Forecast: GBP/USD Weekly Trade Levels

British Pound rallies more than 4% off technical support at yearly lows
GBP/USD rally now testing major resistance pivot- US Core PCE on tap
Resistance 1.2773-1.2816 (key), 1.2893, 1.3091-1.3156 – Support ~1.2592, 1.2493, 1.2364/97

The British Pound surged more than 4% off the yearly lows registered last month with GBP/USD now testing major technical resistance near the yearly highs. The immediate focus is on a reaction into this threshold with the bulls vulnerable sub-1.28. These are the updated targets and invalidation levels that matter on the GBP/USD weekly chart heading into June trade.

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 GBP/USD had, “marked and outside-week reversal off confluent, multi-year uptrend support last week with price threatening the March downtrend. From a trading standpoint, losses should be limited to 1.2364 IF price is heading higher on this stretch – ultimately, we’re on the lookout for an exhaustion high while below the 1.28-handle…” GBP/USD briefly registered an intraweek low at 1.2446 the following week before reversing sharply higher with a rally of more than 2.85% now challenging major technical resistance near the yearly high.

The immediate focus is on February 2019 low / July reversal-close at 1.2773-1.2816- note that both the 2007 trendline (red) and the 25% parallel of the 2022 uptrend (blue) are being challenged here. A topside breach / weekly close above this threshold would be needed to suggest a more significant low was registered last month and validate a larger technical breakout in the Pound. Subsequent resistance objective eyed at the yearly highs (1.2893) and the 2023 high-week close (HWC) / 100% extension of the October advance at 1.3091-1.3156.

Initial weekly support rests with the 52-week moving average (currently ~1.2592) and is backed by the yearly low-week close (LWC) / 61.8% retracement of the April rally at 1.2491/93. Key support remains unchanged at 1.2364/97- a region defined by the 61.8% Fibonacci retracement of the October advance and the January 2023 HWC. A break / weekly close below this threshold is ultimately needed to invalidate the 2022 uptrend.

Bottom line: A 4% rally off the yearly lows is now testing a major resistance pivot near the yearly highs. Risk for topside exhaustion / price inflection into the 1.28-handle. From a trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops – losses would need to be limited to 1.2493 IF price is heading higher on this stretch with a breach above this key pivot zone needed to mark uptrend resumption.

Keep in mind we get the release of key US inflation data into the close of the week / month – stay nimble into the June open and watch the weekly closes here for guidance. Review my latest British Pound Short-term Outlook for 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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