British Pound Technical Analysis: GBP/USD, GBP/JPY, GBP/CAD

The British Pound is grasping on to support in both GBP/USD and GBP/JPY, and the currency currently carries relative strength across many FX pairs. GBP/CAD is also of interest as the Canadian Dollar weakness of the past few months led to a fresh nine-year high in the pair.

GBP/USD

I looked at GBP/USD as one of the more attractive major pairs for USD-weakness last week in the webinar, and I’ll probably be looking at that again in tomorrow’s session. At the time, GBP/USD had built into a falling wedge formation, often approached with aim of bullish reversal, and that’s precisely what took hold a day later.

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For the assist, the 1.3250 psychological level held the low and the corresponding bounce has since pushed above a key Fibonacci level, plotted at 1.3414 and that price has now helped to set support into the close of last week and, so far, through the open of this week.

GBP/USD Four-Hour Chart

Chart prepared by James Stanley; data derived from Tradingview

GBP/USD Bigger Picture

The current zone of short-term support is a significant spot on the chart, especially since the USD started a rally after the Fed’s rate cut in September. That USD strength has shown vividly against many currencies, like the Yen or the Canadian Dollar, but it’s been less noticeable against the British Pound which is why the two pairs below could be of even greater interest.

But – if we do see USD-weakness re-appear GBP/USD remains one of the more attractive major FX pairs, and it’s the 1.3500 level that looms overhead as a significant decision point in the matter. If bulls can force a breach, the door opens for a shot at the recent highs around the 1.3800 handle.

Until then, both GBP/JPY and GBP/CAD may offer a more amenable backdrop for British Pound bulls.

GBP/USD Weekly Price Chart

Chart prepared by James Stanley; data derived from Tradingview

GBP/JPY

It’s a big week for GBP/JPY. The pair jumped over the 205 level two weeks ago as JPY-weakness ran aggressively, but that move pared back after Trump’s tariff threat and last week saw caution take over, with a spinning top formation printing inside of the prior week’s range. If sellers push a red bar this week GBP/JPY can start to look toppy, but there’s a few key supports that they’ll have to grind through first to make that happen. Until then, there’s a shorter-term sequence that can be worked with for bulls.

GBP/JPY Weekly Price Chart

Chart prepared by James Stanley; data derived from Tradingview

GBP/JPY

The four-hour chart shows GBP/JPY in a bull flag formation, and there’s been an attempt to hold support around the 202 level which is the 78.6% Fibonacci retracement of last year’s pullback. That price as tested every day last week and buyers haven’t yet let it breakdown, and there’s another Fibonacci level of interest a little lower, at 201.51.

Key support at this point is the 200.00 handle, which GBP/JPY spent months trying to get above when it finally broke out on the back of Japanese elections two weeks ago.

GBP/JPY Four-Hour Chart

Chart prepared by James Stanley; data derived from Tradingview

GBP/CAD

I looked at this one on Friday but GBP/CAD may be even more attractive than either of the above two markets for GBP bulls. The pair set a fresh nine-year high last week and while that tapered back a bit, buyers have continued to press. The next obvious spot of resistance is the 1.9000 handle, which hasn’t traded in the pair since 2016. But, until that comes into play, there’s support potential at prior resistance, around the 1.8800 level.

GBP/CAD Weekly Chart

Chart prepared by James Stanley; data derived from Tradingview

 

The 1.8800 level has been a contentious spot in GBP/CAD going back to March. But, progressively, the pair started to budge a little higher on tests in June and September, finally breakout out last week.

The question now is whether buyers can hold support at prior resistance.

GBP/CAD Daily Chart

Chart prepared by James Stanley; data derived from Tradingview

--- written by James Stanley, Senior Strategist