To receive Michael’s analysis directly via email, please SIGN UP HERE
- Sterling rally approaching initial resistance targets- broader outlook remains constructive
- Check out our GBP/USD quarterly projections in our Free DailyFX Trading Forecasts
- Join Michael for Live Weekly Strategy Webinars on Mondays at 12:30GMT
GBP/USD Daily Chart
Technical Outlook: Last month we noted that Sterling prices were approaching a region of key, “structural support at the December high / lower parallel at 1.2760/75- a level of interest for possible exhaustion.” Indeed prices registered a low of 1.2773 before reversing sharply higher with the advance now approaching initial resistance targets at 1.3121- a level defined by the 38.2% retracement of the Brexit decline and the mid-July swing highs.
While the immediate risk is for some pullback off this threshold, the broader outlook remains constructive while above 1.2854 with a breach higher targeting subsequent resistance objectives at 1.3272 & the median-line (currently ~1.3350s).
See how shifts in GBPUSD/USD retail positioning are impacting trend- Click here to learn more about sentiment!
Notes:A closer look at price action highlights a near-term slope extending off the August lows with the rally now testing a parallel extending off last week’s high. Interim support rests at 1.3021 with our near-term bullish invalidation level set to 1.2962.
A breach above 1.3121 still has to contend with a near-term Fibonacci zone at 1.3163/84- a region which could be a bigger hurdle for this advance. Bottom line: from a trading standpoint, I’ll continue to favor buying weakness while within this near-term up-slope (red) with a breach above 1.3184 needed to clear the way for the next leg higher in the British Pound.
New to Forex? Get started with this Free Beginners Guide
Relevant Data Releases
Check out this week’s DailyFX Webinar Schedule
Other Setups in Play
- AUD/USD Battles to Surpass 8000- Watch for a Break of this Range
- Strategy Webinar: ECB, BoC Highlight Key Setups for September
- Ethereum Prices Plummet into Support- 295 Critical
- NZD/USD Slides Into Support- Key Levels to Know for NFP
- Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex or contact him at email@example.com.