Skip to Content
News & Analysis at your fingertips.
Free Trading Guides
Please try again

Live Webinar Events


Economic Calendar Events


Notify me about

Live Webinar Events
Economic Calendar Events






More View More
Sterling Forecast: GBP/USD Breakout Imminent as Cable Contracts

Sterling Forecast: GBP/USD Breakout Imminent as Cable Contracts

What's on this page

Sterling Technical Price Outlook: GBP/USD Weekly Trade Levels

  • Sterling technical trade level update – Weekly Chart
  • GBP/USD in consolidation at trend extremes- risk for deeper correction below monthly open
  • Focus is on a breakout of the 1.36 – 1.38 price range for guidance

The British Pound marked a third consecutive weekly decline against the US Dollar this week with GBP/USD nearly 0.5% to trade at 1.3671 ahead of the close of US trade on Friday. The decline highlights a consolidation range at trend extremes and we’re on breakout watch in the weeks ahead. These are the updated targets and invalidation levels that matter on the GBP/USD weekly chart. Review my latest Strategy Webinar for an in-depth breakdown of this Sterling technical setup and more.

Sterling Price Chart - GBP/USD Weekly


Chart Prepared by Michael Boutros, Technical Strategist; GBP/USD on Tradingview

Notes:In last month’s Sterling Weekly Price Outlook we warned that GBP/USD had, “rallied back into downtrend resistance with the September opening-range set just below. From a trading standpoint, a good region to reduce long-exposure / raise protective stops –Look to the breakout for guidance with the recent rally vulnerable while below this slope.” Multiple intra-week attempts to breach this slope failed with the subsequent reversal taking Cable back into longer-term uptrend support (red). The recent decline keeps price within the embedded descending pitchfork formation we’ve been tracking for months now and the focus is on a possible inflection here in the weeks ahead.

A break / close below this week’s low is needed to mark resumption with such a scenario exposing subsequent objectives at the 2017 high-week close at 1.3494 and critical support at 1.3245 – 1.13304- a region defined by the 61.8% Fibonacci retracement off the 2018 decline, the 2020 yearly open and the 100% extension of the June decline. Initial weekly resistance stands with the upper parallel (currently ~1.38) with a close above the 2018 high-week close / 61.8% retracement at 1.3992/97 needed to shift the broader focus back to the topside in the British Pound.

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

Bottom Line:Sterling is in consolidation just below multi-month downtrend resistance with GBP/USD carving a series of lower highs and higher lows just above multi-year uptrend support. From a trading standpoint, the focus is on a breakout of the monthly range for guidance with the broader outlook still weighted to the downside while within this formation. Note that a break lower here could fuel another bout of accelerated losses- stay nimble. Look for rallies to be capped by the 1.38-handle IF price is indeed heading lower. Ultimately , a larger correction may offer more favorable opportunities closer to trend support. 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

Please add a description for the image.
  • A summary of IG Client Sentiment shows traders are net-long GBP/USD - the ratio stands at +1.80 (64.29% of traders are long) – typically bearish reading
  • Long positions are 19.87% lower than yesterday and 20.09% higher from last week
  • Short positions are23.20% higher than yesterday and 22.23% 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 less net-long than yesterday but more net-long from last week. The combination of current positioning and recent changes gives us a further mixed GBP/USD trading bias from a sentiment standpoint.
GBP/USD Bearish
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 8% 0% 2%
Weekly 18% 5% 9%
Learn how shifts in GBP/USD retail positioning impact trend
Get My Guide


UK / US Economic Calendar

Economic Calendar - latest economic developments and upcoming event risk.

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.