Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

Free Trading Guides
Subscribe
Please try again
Select

Live Webinar Events

0

Economic Calendar Events

0

Notify me about

Live Webinar Events
Economic Calendar Events

H

High

M

Medium

L

Low
More View More
Sterling Price Outlook: British Pound Threatens Support- BoE Levels

Sterling Price Outlook: British Pound Threatens Support- BoE Levels

What's on this page

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

Sterling Price Chart - GBP/USD Weekly - British Pound vs US Dollar Trade Outlook - Technical Forecast

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.

GBP Forecast
GBP Forecast
Recommended by Michael Boutros
Download our latest quarterly GBP/USD Price Forecast
Get My Guide

Sterling Trader Sentiment - GBP/USD Price Chart

Sterling Trader Sentiment - GBP/USD Price Chart - British Pound vs US Dollar Trade Outlook - Technical Forecast
  • 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.
GBP/USD Bullish
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -7% -5% -6%
Weekly -6% 9% -1%
Learn how shifts in GBP/USD retail positioning impact trend
Get My Guide

---

Previous Weekly Technical Charts

Forex for Beginners
Forex for Beginners
Recommended by Michael Boutros
New to Forex Trading? Get started with this Beginners Guide
Get My 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.

DISCLOSURES