British Pound Short-term Outlook: GBP/USD Surges into Resistance

British Pound Technical Outlook: GBP/USD Short-Term Trade Levels

• British Pound rally extends to fresh multi-year highs- bulls attempt breakout of June range
• GBP/USD risk for exhaustion / price inflection ahead – Powell testimony, Core PCE on tap
• Resistance 1.3616 (key), 1.3705, 1.3749- Support 1.3415/56 (key), 1.3334, 1.3176

The British Pound surged more than 2% off the weekly lows GBP/USD covering the entire monthly range in just two-days. The rally takes price back into the June range highs and the focus is on today’s close to validate a larger breakout. 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 GBP/USD Short-term Outlook, we noted that, “The British Pound is testing confluent resistance at the yearly high and the focus is on a possible price inflection off this pivot zone.” The highs held for over a week before exhausting with Sterling correcting nearly 2% off the highs. Yesterday price marked an outside-day reversal off confluent support at the 2024 high-day close (HDC) / weekly open / June open at 1.3415/56. The subsequent rally is now testing resistance at the monthly / yearly high and once again we look for possible inflection off this zone into the close of the month.

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 testing the June opening-range high (ORH) at 1.3617 in early U.S. trade. A topside breach / daily close above monthly range highs would threaten uptrend resumption towards subsequent resistance objectives at the 2022 high-day close (HDC) at 1.3705 and the 2022 high at 1.3749. The next major technical consideration is eyed at the 1000% extension of the January advance near 1.3816- look for a larger reaction there IF reached.

Initial support rests with the median-line and is backed again by 1.3415/54. Key support / bullish invalidation now raised to the 61.8% retracement of the May rally / May open at 1.3328/34 with a close below the lower parallel needed to suggest a larger trend reversal is underway. Subsequent support seen at the May low-day close (LDC) at 1.3176.

Bottom line: The British Pound is testing resistance at the monthly range highs today and the focus in on the daily close with respect to 1.3617. From a trading standpoint, losses should be limited to the median-line IF Sterling is heading higher on this stretch with a breakout of the monthly opening-range needed to fuel the next leg of the advance.  

Keep in mind Fed Chair Powell is testifying before congress for the next two-days, and we still get the release of key U.S. inflation data into the close of the week with the May Personal Consumption Expenditures on tap Friday. Stay nimble into the release and watch the weekly close here for guidance. 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

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--- Written by Michael Boutros, Sr Technical Strategist with FOREX.com

Follow Michael on X @MBForex