Sterling Dollar Price Chart: GBP/USD Recovery Fails at Yearly Open
- GBP/USD price recovery targeting resistance – risk for topside exhaustionsub-1.2754
- Check out our 2019 projections in our Free DailyFX Sterling (GBP/USD) Trading Forecasts
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The British Pound rallied more than 2.2% off the June lows with the advance failing to breach / close above the monthly opening-range highs / yearly open resistance. These are the updated targets and invalidation levels that matter on the GBP/USD charts into the close of the month. Review this week’s Strategy Webinar for an in-depth breakdown of this setup and more.
Sterling Price Chart - GBP/USD Daily
Technical Outlook: A five-day rally in the British Pound covered the entire June range with price struggling once again to breach above objective yearly open resistance at 1.2754. Note that the 61.8% retracement of the yearly range rests just higher at 1.2798 and ultimately, a breach / close above this threshold is needed to suggest that a more significant Sterling low is in place. Subsequent topside resistance objectives at the April lows at 1.2866 and 1.2944/50.
Daily support rest with the monthly open at 1.2632 – Ultimately a break below the low-day close at 1.2553 would be needed to mark resumption of the broader downtrend with such a scenario targeting the 78.6% retracement at 1.2469.
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Bottom line: Sterling has preserved the monthly opening-range heading into the final days of June with price failing today at yearly open resistance. From a trading standpoint, the risk is for correction off this threshold – watch today’s close, an outside-day reversal would further highlight the near-term threat for a move lower in the British Pound. Ultimately, we’ll want to look for support ahead of the monthly open for entries IF Cable is indeed heading higher. I’ll publish an updated GBP/USD Price Outlook once we get further clarity in near-term price action.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy
GBP/USD Trader Sentiment
- A summary of IG Client Sentiment shows traders are net-long GBP/USD - the ratio stands at +2.52 (71.6% of traders are long) – bearish reading
- Traders have remained net-long since May 6th; price has moved 1.6% lower since then
- Long positions are 2.3% higher than yesterday and 21.3% lower from last week
- Short positions are 3.1% lower than yesterday and 28.1% 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 further net-long than yesterday & last week, and the combination of current positioning and recent changes gives us a stronger British Pound (GBP/USD) - bearish contrarian trading bias from a sentiment standpoint.
See how shifts in GBP/USD retail positioning are impacting trend- Learn more about sentiment!
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- Written by Michael Boutros, 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.