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The British Pound is down nearly 1.5% this week against the US Dollar to trade at 1.3024 ahead of the New York close on Friday. These are the updated targets and invalidation levels that matter on the GBP/USD weekly chart heading into the close of the month/quarter. 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

GBPUSD

Notes: In my last GBP/USD Weekly Technical Outlook we noted that,” The threat remains for further loses in the British Pound within the confines of ascending formation we’ve been tracking off the 2018 & 2019 lows.” An outside weekly reversal into parallel resistance early in the month has continued to govern the range in price with the recent pullback now testing the 61.8% line of the ascending pitchfork formation.

The threat remains for a deeper pullback within the confines of the uptrend with a break lower here to challenge key support and broader bullish invalidation at 1.2754-1.2801 - a region defined by the 2019 open, the 61.8% retracement and pitchfork support. Resistance stands at 1.3296–1.3302 – a breach / close above this threshold would be needed to fuel the next leg higher targeting the 2017 high-week close / slope resistance at 1.3494.

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

Bottom line:

The broader 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. From a trading standpoint, look for a reaction at this support level early in the month – a break / close below would expose a move on the lower parallel- an area of interest for possible downside exhaustion IF reached. I’ll publish an updated GBP/USD Technical 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

GBPUSD

Looking for a fundamental perspective on GBP? Check out the Weekly GBP Fundamental Forecast.

  • A summary of IG Client Sentiment shows traders are net-long GBP/USD - the ratio stands at +1.92 (65.8% of traders are long) – bearish reading
  • The percentage of traders net-long is now its highest since March 10th
  • Long positions are26.5% higher than yesterday and 17.1% higher from last week
  • Short positions are 28.0% lower than yesterday and 20.9% 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.

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

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

Other Weekly Technical Forecast:

Crude Oil Prices Edge to 5-Month High, Doesn't Feel Like a 'Breakout'