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
Please try again

Live Webinar Events


Economic Calendar Events


Notify me about

Live Webinar Events
Economic Calendar Events






More View More
GBPUSD: Breakout Pullback - How Aggressive Will Bulls Remain to Be?

GBPUSD: Breakout Pullback - How Aggressive Will Bulls Remain to Be?

What's on this page

GBPUSD Talking Points:

- It was a big week for the British Pound as the currency surged on the diminishing prospect of a Hard-Brexit or No-Deal Brexit scenario. Little is certain around how the inevitable split might look; but the fact that a No-Deal Brexit appears to be carrying a lower probability has spurred short-cover as buyers pushed prices up to fresh seven-month-highs.

- Brexit remains the primary driver of GBP as next week brings no high-impact announcements on the economic calendar out of the UK. On a technical basis, the big question is whether bulls can hold on to this week’s topside breakout; or whether a reversal takes place as Brexit dynamics remain in the headlines.

- DailyFX Forecasts are available on a variety of currencies such as the US Dollar or the Euro and are available from the DailyFX Trading Guides page. If you’re looking to improve your trading approach, check out Traits of Successful Traders. And if you’re looking for an introductory primer to the Forex market, check out our New to FX Guide.

Do you want to see how retail traders are currently trading GBPUSD? Check out our IG Client Sentiment Indicator.

It was a bifurcated week of price action in the British Pound, as the pair posed a stern topside breakout Monday-Wednesday that began to pullback on Thursday. That pullback has continued thus far through Friday trade as GBPUSD has dipped back-down to a support zone that runs from 1.3234-1.3250. That support helped to elicit a topside bounce in the pair earlier this morning that ran as high as 1.3286; but that strength could not hold and prices have moved right back down towards the day’s lows.

GBPUSD Hourly Price Chart

gbpusd gbp/usd hourly price chart

Chart prepared by James Stanley

GBPUSD: Bullish Potential, Uncertain Backdrop

With a move like GBPUSD posted in the early-portion of this week, in which a defined directional bias sees price jump through a number of resistance levels, traders can assume that something shifted in the backdrop. And given the events this week around Brexit that our UK-based DailyFX Analysts have been discussing, the motive behind that driver is rather obvious.

What is less obvious, however, is what was at the source of the move: Was this largely coming from short-cover as the odds of a No-Deal Brexit diminished? Or, was there a legitimate shift into buying interest that coupled with that short-cover as investors took on a more optimistic outlook for GBP? Unfortunately, we won’t have an accurate answer until it’s too late; but market participants can base their strategy in GBP around this prognostication.

For those looking at continuation potential in GBPUSD, the possibility for that backdrop still exists. Prices finding support at areas of prior resistance can keep the door open for bullish trend strategies next week. On the below four-hour chart, I’ve pointed out three such areas that can be followed for trend-continuation scenarios.

GBPUSD Four-Hour Price Chart

gbpusd gbp/usd four hour price chart

Chart prepared by James Stanley

GBPUSD Reversal Potential

Given the pullback on Thursday and Friday that never really re-fired into the prior bullish trend, traders can begin to plot potential reversal scenarios; particularly traders that are looking at bullish-USD strategies. A key area on the chart for following such a theme appears to be the support around 1.3187, as this is the 23.6% retracement of the 2014-2016 major move in the pair. This area had also helped to turnaround another bullish advance in January, leading into a 400+ pip reversal that lasted into the middle of last month.

With prices trading above this zone of prior resistance, bearish cases can be difficult to make. But – if prices do budge below this area next week, there would be a break of the recent trend-line to go along with sellers pushing below key support; and this could open the door for bigger-picture reversal potential in the pair.

GBPUSD Daily Price Chart

gbpusd gbp/usd daily price chart

Chart prepared by James Stanley

To read more:

Are you looking for longer-term analysis on the U.S. Dollar? Our DailyFX Forecasts for Q1 have a section for each major currency, and we also offer a plethora of resources on USD-pairs such as EUR/USD, GBP/USD, USD/JPY, AUD/USD. Traders can also stay up with near-term positioning via our IG Client Sentiment Indicator.

Forex Trading Resources

DailyFX offers a plethora of tools, indicators and resources to help traders. For those looking for trading ideas, our IG Client Sentiment shows the positioning of retail traders with actual live trades and positions. Our trading guides bring our DailyFX Quarterly Forecasts and our Top Trading Opportunities; and our real-time news feed has intra-day interactions from the DailyFX team. And if you’re looking for real-time analysis, our DailyFX Webinars offer numerous sessions each week in which you can see how and why we’re looking at what we’re looking at.

If you’re looking for educational information, our New to FX guide is there to help new(er) traders while our Traits of Successful Traders research is built to help sharpen the skill set by focusing on risk and trade management.

--- Written by James Stanley, Strategist for

Contact and follow James on Twitter: @JStanleyFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.