Sterling Technical Price Outlook: Near-term Trade Levels
- Sterling technical trade level update – Daily & Intraday Charts
- GBP/USD near-term breakout testing first major resistance targets
- British Pound constructive while above today’s low
The British Pound surged nearly 1% against the US Dollar since the start of the week with Sterling targeting initial resistance on this near-term breakout. These are the updated targets and invalidation levels that matter on the GBP/USD price charts. Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Cable trade setup and more.
Sterling Price Chart – GBP/USD Daily
![Sterling Price Chart - GBP/USD Daily - British Pound vs US Dollar Trade Outlook - Cable Technical Forecast](https://a.c-dn.net/b/1J8lX5/Sterling-Price-Outlook-British-Pound-Breakout-Trade-GBPUSD-Levels-Cable-Technical-Forecast-MBTS1_body_SterlingPriceChart-GBPUSDDaily-BritishPoundvsUSDollarTradeOutlook-GBPUSDTechnica.jpg)
Chart Prepared by Michael Boutros, Technical Strategist; GBP/USD on Tradingview
Technical Outlook: In my latest Sterling Price Outlook we noted that the GBP/USD pullback was, “trading just above multi-month uptrend support and the immediate focus is on a reaction down here.” The threshold in focus was the Oct 17th swing high at 1.2990- price briefly registered a low last week at 1.2952 before rebounding with another failed attempt early this week giving way to a larger breakout the British Pound.
The advance is now eyeing the first major resistance hurdle at the 61.8% retracement of the decline off the late-December high at 1.3157- we’re looking for reaction here. The focus is higher while above today’s low / trendline support around 1.3030/36 with a close below 1.2990 still needed to put the bears in control. A topside breach from here exposes subsequent daily resistance objectives at the yearly open at 1.3253 and 1.3281/84- look for a bigger reaction there IF reached.
Sterling Price Chart – GBP/USD 120min
![Sterling Price Chart - GBP/USD 120min - British Pound vs US Dollar Trade Outlook - Cable Technical Forecast](https://a.c-dn.net/b/4fX01s/Sterling-Price-Outlook-British-Pound-Breakout-Trade-GBPUSD-Levels-Cable-Technical-Forecast-MBTS1_body_SterlingPriceChart-GBPUSD120min-BritishPoundvsUSDollarTradeOutlook-GBPUSDTechnic.jpg)
Notes: A closer look at Sterling price action shows GBP/USD trading within the confines of a near-term ascending pitchfork formation extending off the monthly lows. Note that the upper parallel and the 100% extension of the weekly rally further highlighting near-term resistance at 1.3157 – the immediate advance may be vulnerable into this threshold.
Initial support rests at the median-line, currently around 1.3080 backed by near-term bullish invalidation at 1.3036 – both levels of interest for possible downside exhaustion / long-entries IF reached. A breach keeps the focus on topside targets at 1.3213, 1.3253 and the late-December high / 61.8% retracement of the decline off the 2019 high at 1.3281/84.
![](https://a.c-dn.net/b/0YPMDo/logo-stripe.png)
![GBP Forecast](https://a.c-dn.net/b/29RUIr/500x707Forecast-GBP.png)
![GBP Forecast](https://a.c-dn.net/b/29RUIr/500x707Forecast-GBP.png)
Bottom line: The Sterling breakout is testing the first major resistance zone into 1.3157 and leaves the immediate advance vulnerable while below this threshold. From a trading standpoint, a good spot to reduce long-exposure / raise protective stops – be on the lookout for possible exhaustion on pullbacks while above 1.3030 with a breach higher keeping the focus on yearly-open resistance. Review my latest British Pound Weekly Price Outlook for a closer look at the longer-term GBP/USD technical trade levels.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy
Sterling Trader Sentiment – GBP/USD Price Chart
![Sterling Trader Sentiment - GBP/USD Price Chart - British Pound vs US Dollar Trade Outlook - Technical Forecast](https://a.c-dn.net/b/1EFNrD/Sterling-Price-Outlook-British-Pound-Breakout-Trade-GBPUSD-Levels-Cable-Technical-Forecast-MBTS1_body_SterlingTraderPositioning-GBPUSDPriceChart-BritishPoundvsUSDollarTradeOutlook-GB.jpg)
- A summary of IG Client Sentiment shows traders are net-long GBP/USD - the ratio stands at +1.24 (55.44% of traders are long) – weak bearish reading
- Long positions are11.58% lower than yesterday and 22.46% lower from last week
- Short positions are7.02% higher than yesterday and 17.55% 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. Yet traders are less net-long than yesterday & compared with last week and the recent changes in sentiment warn that the current GBP/USD price trend may soon reverse higher despite the fact traders remain net-long.
Change in | Longs | Shorts | OI |
Daily | 3% | -7% | -3% |
Weekly | 4% | -10% | -5% |
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Key UK / US Economic Releases
![UK / US Economic Releases - GBP/USD Calendar](https://a.c-dn.net/b/4bdEj3/Sterling-Price-Outlook-British-Pound-Breakout-Trade-GBPUSD-Levels-Cable-Technical-Forecast-MBTS1_body_UKUSKeyDataReleases-GBPUSDEconomicCalendar-BritishPoundvsUSDollarTradeOutlook-St.jpg)
Economic Calendar - latest economic developments and upcoming event risk.
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- Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex