British Pound Technical Forecast: GBP/USD Rejects 1.30 Ahead of BoE

British Pound Technical Forecast: GBP/USD Weekly Trade Levels

British Pound rally responds to key resistance zone- snaps back nearly 3%
GBP/USD vulnerable to deeper pullback– constructive while above yearly trend support
Sterling resistance 1.30, 1.3103, 1.3273– support 1.2757/73, 1.2630 (key), 1.2397

The British Pound rallied 0.48% against the US Dollar this week with GBP/USD poised to close well off the weekly highs. While the technical outlook remains constructive, Sterling may be vulnerable here on the heels of an 11% run off the yearly lows with major event risk on tap into the August open. These are the updated targets and invalidation levels that matter on the GBP/USD weekly technical chart.

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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 Sterling was carving the July opening-range just below resistance with a, “topside breach / close above the June high needed to mark resumption towards subsequent resistance objectives at the 1.30-handle and the 61.8% extension of the 2022 advance at 1.3103.” A topside breach the following day rallied more than 3.8% off the monthly lows to register an intraday high at 1.3142. GBP/USD fell more than 2.9% off those highs- Is a more significant medium-term high in place?

Initial weekly support tested this week at 1.2757/73- a region defined by the 61.8% Fibonacci retracement of the 2021 decline and the February 2019 swing low. Medium-term bullish invalidation now raised to the 38.2% retracement of the 2022 advance which converges on channel support near 1.2630.

Initial weekly resistance steady at 1.30 backed again by 1.3103 and the 2007 trendline. Ultimately, a breach / close above the 2021 low-week close at 1.3273 would be needed to fuel the next major leg in price towards the 2020 open at 1.3532.

Bottom line: Sterling has run into confluent resistance this month and the focus is on this pullback off the highs – from a trading standpoint, losses should be limited to 1.2630 IF price is heading higher on this stretch with a breach above the highs needed to mark resumption on this move. Keep in mind we head into the start of a new month next week with the Bank of England (BoE) interest rate decision and US non-farm payrolls on tap- stay nimble here. I’ll publish an updated British Pound Short-term Outlook once we get further clarity on the near-term GBP/USD technical trade levels.

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

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