British Pound Technical Price Outlook: GBP/USD Weekly Trade Levels
- Sterling Trade Level Technical Update – Weekly Chart
- GBP/USD 2-week bounce off uptrend support targets initial resistance targets
- Weekly Resistance 1.2650, 1.2754(key), 1.2956 – Support 1.2351, 1.2261(critical), 1.2166
A reversal of sterling’s long-term uptrend support fueled a rally of more than 4.1% from yearly lows. The two-week rally takes GBP/USD into initial resistance with major technical confluence just higher – we are on the lookout for possible upward exhaustion ahead of the June open. It’s the updated targets and invalidation levels that count on the GBP/USD weekly chart. Exam my last Strategy Webinar for a detailed analysis of this sterling technique setup and more.
Pound Sterling Price Chart – GBP/USD Weekly
Chart prepared by Michel Boutrostechnical strategist; GBP/USD on Tradingview
Remarks: In my last Pound sterlingWeekly Technical forecast we noted that the GBP/USD, “the dip could be vulnerable in the days ahead as a multi-week decline nears longer-term technical support.” Specifically, “June 2020 lows at 1.2252 and the closing of the low week of May to 1.2166– the two levels of interest for a possible downward exhaustion SI reached. The British Pound saw a low of 1.2156 in the following days before reversing sharply higher with a two-week advance bringing GBP/USD to the first resistance level here at 23.6%. Fibonacci retracement of the 2021 decline to 1.2650.
A significant plus resistance the area is considered at the closing of the low week 2018 / 2019 annual opening at 1.2754– a weekly break/close above this threshold would be needed to shift focus to the 38.2% retracement at 1.2956. First week Support now 1.2351 with a weekly break/close below the yearly low week close at 1.2261 necessary to power the next lower price step towards 1.2166 and the next major technical confluence in 1.1950-1.2021.
For a full analysis of Michael’s trading strategy, see his Fundamentals of Technical Analysis Series on Bbuild a Jrading Sstrategy
Conclusion : The British Pound rebound may have further upside potential here, but we are watching for a possible price inflection on a stretch towards 1.2754 IF reached. From a trading perspective, look for a top of exhaustion heading into the June open – ultimately losses should be governed by the yearly level of 1.2261 SI, in fact, a bottom largest was recorded this month. I will post an update to the GBP price outlook once we have more clarity on the GBP/USD’s short-term technical trading levels. Stay tuned!
British Pound Traders Sentiment – GBP/USD Price Chart
- A summary of IG Customer Sentiment shows traders are net-long GBP/USD – ratio is +1.94 (65.95% of traders are long) – generally bearish reading
- Long positions are 0.23% less than yesterday and 4.09% less than last week
- Short positions are 4.73% more than yesterday and 18.38% more than last week
- We generally take a contrarian view of crowd sentiment, and the fact that traders are net buyers suggests that GBP/USD prices may continue lower. Still, traders are net less long than yesterday and compared to last week. Recent changes in feeling warn that the current GBP/USD price trend may soon reverse higher despite traders staying sharp.
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— Written by Michel BoutrosTechnical Strategist at DailyFX
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