British Pound Forecast: GBP/USD Searches Support

British Pound Technical Forecast: GBP/USD Weekly Trade Levels

British Pound falls nearly 4% off yearly high, four-week decline stalls into Fibonacci support
GBP/USD threat for downside exhaustion / price inflection into monthly close- NFP on tap
Resistance 1.3122, 1.3273, 1.3413 (key)- Support 1.2900, 1.2731/73 (key), 1.2494

The British Pound plunged more than 3.9% off the yearly highs with a four-week decline taking GBP/USD to multi-month lows this week. Sterling was halted just ahead of Fibonacci support and the while the medium-term threat remains lower, we’re on the lookout for a possible exhaustion low in the days ahead with major event risk on tap into the monthly cross. 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 my last British Pound Weekly Forecast we noted that the GBP/USD was testing slope support and that, “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.” GBP/USD broke support this week with the decline turning just pips ahead of the 38.2% retracement of the October 2023 advance at 1.2900 (low registered at 1.2907). Is a near-term exhaustion-low in place on the heels of this four-week sell-off?

For now, the focus remains lower while below the September weekly-reversal close at 1.3122 with a break / close below 1.29 exposing a more significant technical confluence zone at 1.2731/74- a region defined by the objective 2024 yearly open, the 61.8% retracement, the 52-week moving average, and the February 2019 low. This is an area of interest for possible downside exhaustion / price inflection IF reached and a close below would be needed to invalidate the broader 2023 uptrend. Subsequent support seen at the yearly low-week close (LWC) at 1.2494 in the event of a break.

Topside resistance levels remain unchanged at the 2024 low-week close (LWC) at 1.3273 and the 78.6% retracement of the 2021 decline at 1.3414. Ultimately, a breach / close above the 2009 low/ 2019 high at 1.3500/15 would be needed to mark resumption of the multi-year uptrend.

Bottom line: A four-week decline in the British Pound takes price into Fibonacci support with the lower bounds of the multi-year uptrend just lower. From a trading standpoint, rallies should be limited to 1.3122 IF price is heading lower on this stretch with a close below 1.29 needed to fuel a test of yearly-open support.

Keep in mind we have key US inflation data on tap next week with US Non-Farm Payrolls released into the November-open on Friday. Note that NFPs, US elections, and the FOMC interest rate decision over the next two weeks represent major event risk for the USD crosses- stay nimble here and watch the weekly closes 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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