Tue, Mar 28, 2023 @ 15:26 GMT
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British Pound Technical Forecast: GBP/USD Dives Towards Support

British Pound technical forecast: GBP/USD weekly trade levels

  • British Pound holds December highs- reverses back into downtrend support
  • GBP/USD threat remains for further losses medium-term
  • Sterling resistance ~1.2156, 1.2448, 1.2773– support 1.1783-1.1841, 1.1632/44 (key),

The British Pound plunged more than 4.2% off the January highs with GBP/USD now approaching initial trend support near the yearly low. While an outside-weekly reversal suggests some downside exhaustion here, Sterling remains vulnerable to a deeper correction while below this week’s high. These are the updated targets and invalidation levels that matter on the GBP/USD weekly technical chart.

British Pound Price Chart – GBP/USD Weekly

Chart Prepared by Michael Boutros, Sr. Technical Strategist; GBP/USD on TradingView

Technical Outlook: The British Pound has been trading within the January range since the start of the month with a reversal off Fibonacci resistance at 1.2448 taking GBP/USD back into downtrend support.

The focus is on a possible reaction off a key technical confluence at 1.1783-1.1841– a region defined by the 100% extension of the recent decline and the objective 2023 opening-range low. Ultimately, a break / weekly close below the 2020 low-week close / 38.2% retracement at 1.1632/44 is needed to mark resumption of the broader downtrend.

Initial resistance stands with the 52-week moving average (currently ~1.2156) with a breach above the yearly highs exposing pitchfork resistance around the February 2019 low at ~1.2773– an area of interest for possible exhaustion / price inflection IF reached.

British Pound Price Chart – GBP/USD Weekly (2009 Price Parallel)

Chart Prepared by Michael Boutros, Sr. Technical Strategist; GBP/USD on TradingView

A parallel of the 2009 rally (pink) suggests a period of consolidation here into these support zones before a larger correction lower. For context, Sterling remained rangebound for nearly 230 days before breaking decisively – the current GBP/USD range is roughly 90-days in.

Bottom line: The British Pound remains vulnerable to further losses but is quickly approaching initial support levels near the January low. From at trading standpoint, look to reduce portions of short-exposure / lower protective stops on a stretch towards 1.1640. Rallies should be capped by this week’s high IF price is heading lower. I’ll publish an updated British Pound short-term outlook once we get further clarity on the near-term GBP/USD technical trade levels.

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DISCLAIMER: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase of sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

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