British Pound Short-term Outlook: GBP/USD Support Test at September Low

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.

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

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

Follow Michael on X @MBForex

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