British Pound Technical Price Outlook: GBP/USD Weekly Trade Levels
- Sterling technical trade level update – Weekly Chart
- GBP/USD plunge testing lateral support- risk weighted to the downside into September
- Weekly resistance 1.1950, ~1.2150s, 1.2261 (key)– Support 1.1414/80 (key), 1.11, 1.0840
The British Pound plunged for a third consecutive week against the US Dollar with GBP/USD plummeting more than 5.6% off the August highs. The decline takes Sterling into key lateral support zones and a weekly close below these levels could leave Cable vulnerable to further losses in the weeks ahead. These are the updated targets and invalidation levels that matter on the GBP/USD weekly chart heading into the September open. Review my latest Strategy Webinar for an in-depth breakdown of this Sterling technical setup and more.
British Pound Price Chart – GBP/USD Weekly
Chart Prepared by Michael Boutros, Technical Strategist; GBP/USD on Tradingview
Notes: In last month’s British PoundWeekly Technical Forecast we noted that GBP/USD had, “rebounded off downtrend support and leaves room for further near-term gains within the broader decline– rallies should be limited to yearly channel resistance IF price is still indeed heading lower on this stretch. From a trading standpoint, be on the lookout for possible topside exhaustion ahead of 1.2348 with a weekly close below 1.1861 needed to clear the way for the next leg lower in price.”
Sterling registered a high 1.2293 into the August open with price breaking below the monthly opening-range on the 18th. The subsequent decline is now probing support objectives at the 2020 close low at 1.1650 with key support steady at the 2020 / 1984 lows at 1.1414/80– look for a larger reaction in price there IF reached. Initial weekly resistance now at 1.1950 backed by yearly channel near ~1.2150s. Ultimately, a breach / weekly close above the May low-week close at 1.2261 would be needed to invalidate the current downtrend / alleviate further downside pressure.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy
Bottom Line: The British Pound has broken to fresh yearly lows with the yearly downtrend intact heading into the September open. From at trading standpoint, rallies should be capped by the1.1950 IF price is heading lower on this stretch with 1.1414/80 representing the next major support zone of interest. Keep in mind we are heading into the clos of the month with US Non-Farm Payrolls (NFP) on tap ahead of an extended holiday break – tread lightly and stay nimble here into the September open.
British Pound Trader Sentiment – GBP/USD Price Chart
- A summary of IG Client Sentiment shows traders are net-long GBP/USD – the ratio stands at +3.68 (78.61% of traders are long) – typically bearish reading
- Long positions are 6.62% higher than yesterday and 4.33% higher from last week
- Short positions are 2.29% higher than yesterday and 8.35% higher from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests GBP/USD prices may continue to fall. Traders are more net-long than yesterday but less net-long from last week. The combination of current positioning and recent changes gives us a further mixed GBP/USD trading bias from a sentiment standpoint.
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— Written by Michael Boutros, Technical Strategist with DailyFX
Follow Michael on Twitter @MBForex
