Sterling Technical Price Outlook: GBP/USD Weekly Trade Levels
- Sterling technical trade level update – Daily & Intraday Charts
- GBP/USD trading just above key uptrend support; near-term bullish invalidation at 1.29
- FOMC & BoE interest rate decisions on tap this week
The British Pound is down nearly 0.8% against the US Dollar since the start of the week with Sterling continuing to range just above a critical support barrier ahead of Thursday’s Bank of England interest rate decision. These are the updated targets and invalidation levels that matter on the GBP/USD weekly price chart heading into the release. Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Cable trade setup and more.
Sterling Price Chart - GBP/USD Weekly
Chart Prepared by Michael Boutros, Technical Strategist; GBP/USD on Tradingview
Notes: In our last Sterling Weekly Price Outlook we noted that the GBP/USD, “breakout failed at a major technical resistance zone last month and the focus is on a pullback into the start of the year. From a trading standpoint, looking for a larger setback towards confluence support for guidance – IF price is indeed heading higher on this stretch, losses should be limited to the 1.29-handle.” The outlook remains unchanged heading into this week’s FOMC and BoE interest rate decisions.
Cable is now trading just above confluence support at 1.2905/21- a region defined by the 38.2% retracement of the September advance and the late-December low. Note that basic channel support also converges on this zone and further highlights its technical significance- a break / close below this threshold would suggest a larger correction is underway in the British Pound with such a scenario exposing the 2019 yearly open at 1.2754 and the 100% extension at 1.2674. Weekly resistance stands at the monthly opening-range highs / 61.8% retracement at 1.3282 with a close above the 2019 high-week close at 1.3335 needed to fuel the next leg higher in price.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy
Bottom Line: Sterling trading within a contractionary range just above confluence uptrend support at the 1.29-handle with major event risk on tap this week. From a trading standpoint, the immediate downtrend is vulnerable heading into this key support zone. A good spot to reduce short-exposure / lower protective stops – be on the lookout for downside exhaustion into this region IF reached. Ultimately, we’re looking for evidence of a near-term low to fade for a larger recovery. Review my latest Sterling Price Outlook for a closer look at the near-term GBP/USD technical trade levels.
Sterling Trader Sentiment - GBP/USD Price Chart
- A summary of IG Client Sentiment shows traders are net-long GBP/USD - the ratio stands at +1.84 (64.79% of traders are long) – bearish reading
- Long positions are6.66% higher than yesterday and 2.95% higher from last week
- Short positions are5.69% lower than yesterday and 15.74% lower 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. Traders are further net-long than yesterday & last week, and the combination of current positioning and recent changes gives us a stronger GBP/USD-bearish contrarian trading bias from a sentiment standpoint.
| Change in | Longs | Shorts | OI |
| Daily | 3% | -7% | -3% |
| Weekly | 4% | -10% | -5% |
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Previous Weekly Technical Charts
- Gold (XAU/USD)
- Canadian Dollar (USD/CAD)
- New Zealand Dollar (NZD/USD)
- US Dollar (DXY)
- Euro (EUR/USD)
- Australian Dollar (AUD/USD)
- Crude Oil (WTI)
- Japanese Yen (USD/JPY)
--- Written by Michael Boutros, Technical Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex
