British Pound Short-term Outlook: GBP/USD Support Test at September Low
British Pound plunged into October with a decline of more than 3% now testing the first major support hurdle. Battle lines drawn on the GBP/USD technical charts.
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British Pound Technical Outlook: GBP/USD Short-Term Trade Levels
- British Pound reverses off confluent resistance- plunges 3% off multi-yearly high
- GBP/USD now testing technical support- risk for exhaustion / price inflection
- Resistance 1.3122, ~1.3160s, 1.3260/73 (key)- Support 1.30/44, 1.2927 (key), 1.2857
The British Pound rally stalled into technical resistance last month with GBP/USD plunging more than 2.6% since the start of October. A two-week decline is now testing the first major support pivot near the September lows and the focus is on possible exhaustion / price inflection here in the days ahead. Battle lines drawn on the GBP/USD short-term technical charts.
Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Sterling technical setup and more. Join live on Monday’s at 8:30am EST.
British Pound Price Chart – GBP/USD Daily
Chart Prepared by Michael Boutros, Sr. Technical Strategist; GBP/USD on TradingView
Technical Outlook: In my last British Pound Short-term Outlook, we noted that a five-day rally in GBP/USD was, “approaching confluent resistance into the yearly uptrend. From a trading standpoint, look to reduce portions of long-exposure / raise protective stops on a stretch towards 1.3414 – losses should be limited to the median-line IF price is heading higher on this stretch…” Sterling held resistance for five-days before reversing sharply into the October open with break below the median-line fueling a decline of more than 3% off the yearly high.
The pullback is testing pivotal support today at 1.3000/45- a region defined by September swing low, the low-day close (LDC), and the July high. Looking for a possible reaction off this mark today with broader bullish invalidation now raised to the lower parallel / 38.2% retracement of the late-2023 rally at 1.2927- risk for an exhaustion low into this this level.
British Pound Price Chart – GBP/USD 240min
Chart Prepared by Michael Boutros, Sr. Technical Strategist; GBP/USD on TradingView
Notes: A closer look at Sterling price action shows GBP/USD trading within the confines of a proposed descending pitchfork off the August / September highs. Weekly open resistance is eyed at 1.3122 and is backed by the median-line (currently ~1.3160s). Near-term bearish invalidation now stands at 1.3259/73- a region defined by the August high-day close (HDC) and the 2021 low-week close (LWC). A topside breach / close above this threshold would be needed to mark uptrend resumption towards 1.3414 and beyond.
Bottom line: GBP/USD has seen only one daily advance since the start of October with a 3% decline taking price into initial support here at the September lows. From a trading standpoint, a good zone to reduce portions of short-exposure / lower protective stops – losses would need to be limited to the lower parallel / 1.2928 for the April advance to remain viable with a close above 1.3273 needed to mark uptrend resumption. Review my latest British Pound Weekly Forecast for a closer look at the longer-term GBP/USD technical trade levels.
Key GBP/USD Economic Data Releases
Active Short-term Technical Charts
- Australian Dollar Short-term Outlook: AUD/USD Vulnerable Sub-6800
- Canadian Dollar Short-term Outlook: USD/CAD Bulls Charge Ahead of NFP
- Gold Short-term Outlook: XAU/USD Bulls at Major Hurdle Ahead of NFP
- Euro Short-term Technical Outlook: EUR/USD Plunges into October
- US Dollar Short-term Outlook: USD Defends Support at Fresh Yearly Low
--- Written by Michael Boutros, Sr Technical Strategist with FOREX.com
Follow Michael on X @MBForex
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