Skip to Content
News & Analysis at your fingertips.
Free Trading Guides
Please try again

Live Webinar Events


Economic Calendar Events


Notify me about

Live Webinar Events
Economic Calendar Events






More View More
Sterling Weekly Price Outlook: GBP/USD Breakdown Searches for Support

Sterling Weekly Price Outlook: GBP/USD Breakdown Searches for Support

What's on this page

In this series we scale-back and look at the broader technical picture to gain a bit more perspective on where we are in trend. Sterling is down more than 3.3% against the US Dollar from the yearly high with price breaking below a multi-month consolidation last week. These are the updated targets and invalidation levels that matter on the GBP/USD weekly price chart. Review this week’s Strategy Webinar for an in-depth breakdown of this setup and more.

New to Forex Trading? Get started with this Free Beginners Guide

GBP/USD Weekly Price Chart

Sterling Price Chart - GBP/USD Weekly - British Pound vs US Dollar

Notes: In last month’s GBP/USD Weekly Technical Outlook we noted that the, “risk remains weighted to the downside heading into the close of the month / quarter but ultimately the broader outlook remains constructive while above yearly open support at 1.2754.” A break below the 61.8% line of the ascending pitchfork formation and a multi-week consolidation last week has fueled a drop towards parallel support and we’re looking for a reaction just lower.

Slope support is eyed at ~1.2860 backed closely by 61.8% retracement at 1.2801 and the yearly open at 1.2754- a break / close below this threshold would be needed to validate resumption of the broader downtrend targeting the 2016 low-week close / 78.6% retracement at 1.2433/69. Initial resistance stands with the April open at 1.3036 backed by the 1.33-handle – a breach / close above this threshold would shift the focus back to the long-side targeting the median-line and the 2017 high-week close / 200-week moving average at ~1.35.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

Bottom line: Sterling has broken a multi-week consolidation pattern with the decline now approaching broader pitchfork support. From a trading standpoint, the immediate risk is lower but we’re looking for a reaction on a stretch into structural support- a good spot to reduce short-exposure / lower protective stops - look for a reaction / possible price exhaustion there IF reached. I’ll publish and updated GBP/USD Price Outlook once we get further clarity in near-term price action.

Even the most seasoned traders need a reminder every now and then- Avoid these Mistakes in your trading

GBP/USD Trader Sentiment

Sterling Trader Sentiment - British Pound vs US Dollar - GBP/USD Price Chart
  • A summary of IG Client Sentiment shows traders are net-long GBP/USD - the ratio stands at +2.66 (72.7% of traders are long) – bearish reading
  • traders have remained net-long since March 26th; price has moved 2.0% lower since then
  • Long positions are 7.6% lower than yesterday and 10.5% higher from last week
  • Short positions are 12.5% higher than yesterday and 7.5% higher from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Sterling prices may continue to fall. Traders are less net-long than yesterday but more net-long from last week andthe combination of current positioning and recent changes gives us a further mixed GBP/USD trading bias from a sentiment standpoint.

See how shifts in GBP/USD retail positioning are impacting trend- Learn more about sentiment!


Relevant UK / US Economic Data Releases

UK / US Economic Data Releases - GBP/USD Economic Calendar - Sterling

Previous Weekly Technical Charts

Learn how to Trade with Confidence in our Free Trading Guide

--- Written by Michael Boutros, Technical Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.