British Pound Forecast: GBP/USD Eight-Week Breakdown Testing Support
British Pound plunged for an eighth week with a 7% decline off the yearly high now testing the key support. Battle lines drawn on the GBP/USD weekly technical chart.
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British Pound Technical Forecast: GBP/USD Weekly Trade Levels
- British Pound plunges 4.3% off monthly high- eight-week decline breaks multi-year uptrend
- GBP/USD bears now testing technical support- threat for downside exhaustion / price inflection
- Resistance 1.29, 1.3045, 1.3112 (key)- Support 1.2731/89 (key), 1.2494-1.2542, 1.2397
The British Pound marked an eighth-consecutive weekly decline on Friday with GBP/USD now off more than 7% from the September/ yearly high. A break of the yearly uptrend takes Sterling into the fist major support hurdle and the focus is on possible inflection off this zone into the close of the month. These are the levels that matter 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 my last British Pound Weekly Forecast we noted that GBP/USD was approaching support at the yearly uptrend and that, “rallies would need to be limited to 1.29 IF price is heading for a larger break with a close below 1.2731 needed to fuel the next leg of the decline.” Sterling broke lower that week with the decline extending into the next major technical confluence here at 1.2493-1.2542- a region defined by the 2024 low-week close (LWC) and the 78.6% retracement of the yearly range.
Note that the 2007 trendline converges on this threshold over the next week and further highlights the technical significance of this zone. Looking for a reaction off this mark in the coming days.
Weekly resistance now eyed back at 1.2731/84- a region defined by the objective yearly open, the 61.8% retracement, the February 2019 low and the 52-week moving average. A breach / close above this threshold would suggest that a more significant low is in place with subsequent resistance eyed at the July high at 1.3045 and the September weekly reversal close at 1.3122.
A break below this key pivot zone exposes subsequent support objectives the April low-close / 2023 January high-week close (HWC) / May LWC at 1.2367/97 and the October LWC at 1.2237. The next major technical consideration rests with the 2023 yearly open / LWC at 1.2084-1.2113.
Bottom line: A break of the 2022 pitchfork takes Sterling into the first major pivot zone with the eight-week sell-off vulnerable into the 2024 low-week close- risk for some inflection here. From a trading standpoint, a good zone to reduce portions of short-exposure / lower protective stops- rallies should be limited to the yearly moving average (1.2783) IF price is heading lower on this stretch with a close below 1.2493 needed to fuel the next leg of the decline.
Keep in mind we get the release of US inflation data next week into the close of a shortened holiday week. Stay nimble into the monthly cross and watch the weekly closes 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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