British Pound Forecast: GBP/USD Bears Wrestle 1.30 Support

British Pound Technical Forecast: GBP/USD Weekly Trade Levels

British Pound plunges into October- down eight of the past ten-days
GBP/USD decline testing support for second week- risk for price infection ahead
Resistance 1.3273, 1.3414 (key), 1.3500/15– Support 1.3000/45, 1.2731/73 (key), 1.2494

The British Pound is attempting to mark a third-weekly decline with GBP/USD plunging more than 2.6% since the start of October. The sell-off is testing a major pivot zone for the second week and the focus in on possible price inflection with key UK / US data on tap over the next few days. These are the 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: In last month’s British Pound Weekly Forecast we noted that the GBP/USD September breakout was, “testing initial hurdles here at Fibonacci resistance. From a trading standpoint, losses should be limited to 1.3273 IF Sterling is heading higher on this stretch with a close above 1.3414 needed to fuel the next leg in price.” Sterling held resistance into the close with a break below 1.3273 the following week fueling a decline of more than 3% off yearly high.

The sell-off is approaching support here at the 38.2% retracement of the yearly range / July highs at 1.300/45. Note that the 25% parallel has caught the lows on the last two-approaches and a close below this level could fuel a larger correction towards key support / bullish invalidation at 1.2731/73- a region defined by the objective 2024 yearly, the 61.8% retracement, the 52-week moving average, and the February 2019 low. A break below this region would invalidate the yearly uptrend and suggest a more significant high was registered last month. Subsequent support at the yearly low-week close (LWC) at 1.2494.

Initial weekly resistance is eyed a the 2021 LWC at 1.3273 with a breach / close above 1.3414 still needed to mark uptrend resumption towards subsequent objectives at the 2009 low / 2019 high at 1.3500/15 and the 1.618% extension of the October 2023 advance / 2022 high-week close (HWC) at 1.3671/85- an area of interest for possible topside exhaustion IF reached.

Bottom line: The British Pound has been testing uptrend support for the last two-week and the focus is on possible inflection off this pivot zone. From a trading standpoint, a good zone to reduce portions of short-exposure / lower protective stops- rallies should be limited to 1.3273 IF Sterling is heading lower here with a break / close below the 1.30-handle needed to fuel a deeper correction with the yearly uptrend.

Keep in mind we get the release of UK employment data tomorrow with the September Consumer Price Index (CPI) on tap Wednesday and US retail sales on Thursday. Stay nimble into the releases and watch the weekly close for guidance here. 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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