British Pound Forecast: GBP/USD Rally Stalls at Trend Resistance
GBP/USD exhausted into uptrend resistance at multi-year highs this week with the advance vulnerable into June. Battle lines drawn on the Sterling weekly technical chart.
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British Pound Technical Forecast: GBP/USD Weekly Trade Levels
- British Pound rally stalls into trend resistance at multi-year highs- exhaustion risk
- GBP/USD broader outlook remains constructive- NFPs on tap into monthly cross
- Resistance 1.3500/15 (key), 1.3671, 1.38- Support 1.3414, 1.3241 (key), 1.3023
Sterling failed into trend resistance at multi-year highs this week and while broader outlook remains tilted to the topside, the advance may be vulnerable into the monthly cross. 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 my last British Pound Weekly Forecast we noted that the GBP/USD was, “Sterling is trading just below resistance at the yearly highs for a fifth-consecutive week. Looking for a reaction off this mark for guidance. From a trading standpoint, losses would need to be limited to 1.3270 IF price is heading higher on this stretch with a close above 1.3514 ultimately needed to mark resumption of the yearly uptrend.” Sterling ripped higher later that week with the rally extending into the upper parallel ahead of the monthly close.
The focus into the start of June will be on nearby support (at former resistance) at the 1.3414 with medium-term bullish invalidation now raised to the 23.6% retracement of the yearly range at 1.3241. Note that the median-line converges on this threshold late-month and a close below this slope would be needed to suggest a more significant high is in place / a larger reversal is underway. Subsequent support rests with the 38.2% retracement at 1.3023 and the 52-week moving average (currently near ~1.2877).
A topside breach / close above the 75% parallel is needed to ignite the next major leg of the advance. Subsequent resistance objectives are eyed at the 2022 high-week close (HWC) at 1.3671, the 1.38-handle, and the 61.8% extension of the late-2022 advance at 1.4003.
Bottom line: Sterling is trading at uptrend resistance heading into June and while the broader outlook remains constructive, the January advance may be vulnerable while below this slope. From a trading standpoint, losses should be limited to 1.3240 IF price is heading higher on this stretch with a weekly close above parallel resistance needed to mark trend resumption.
Keep in mind we get the release of key US labor data next week with the May Non-Farm Payrolls report on tap Friday. Stay nimble into the monthly cross and watch the weekly closes 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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