Sterling Technical Price Outlook: GBP/USD Weekly Trade Levels
- Sterling technical trade level update – Weekly Chart
- GBP/USD breakout approaching resistance at 2019 / 2020 highs
- Critical resistance 1.3494– Weekly support 1.3250
The British Pound is attempting to mark a fifth consecutive weekly advance against the US Dollar into the open of December trade with GBP/USD up than 0.8% ahead of the New York close on Tuesday. A rally of more than 6% off the September lows takes price towards a critical resistance zone near multi-year downtrend extremes – we’re looking for price inflection here early in the month with the immediate advance vulnerable on a push into this key threshold. These are the updated targets and invalidation levels that matter on the GBP/USD weekly technical chart. Review my latest Strategy Webinar for an in-depth breakdown of this Cable technical setup and more.
Sterling Price Chart - GBP/USD Weekly
![Sterling Price Chart - GBP/USD Weekly - British Pound vs US Dollar Outlook - Cable Technical Foreast](https://a.c-dn.net/b/2ue7K2/Sterling-Outlook-GBP-USD-Breakout-Targets-2019-2020-Yearly-Highs-British-Pound-Technical-Forecast-Cable-MBTS12_body_SterlingPriceChart-GBPUSDWeekly-BritishPoundvsUSDollarTradeOutlook-CableTechnica.jpg)
Chart Prepared by Michael Boutros, Technical Strategist; GBP/USD on Tradingview
Notes: In last month’s Sterling Weekly Price Outlook we noted to, “be on the lookout for possible topside exhaustion into 1.3250 with the broader advance vulnerable while below.” GBP/USD broke & closed above this key zone one week later before resuming higher with the advance now approaching the next major lateral resistance pivot at the 2017 high-week reversal close at 1.3494. Note that the upper parallel of the multi-year descending pitchfork formation rests just below this threshold – we’re looking for a reaction up here.
A weekly close above 1.3494 would be needed to validate a breakout of multi-year downtrend resistance with such a scenario exposing 1.3675 and the 2018 high-week close at 1.3997. Initial weekly support now rests at the yearly open / 61.8% Fibonacci retracement at 1.3245/50 backed by the May trendline / channel support, currently ~1.2950s. Ultimately a close below confluence support at 1.2693-1.2754 would be needed to mark resumption of the broader 2018 downtrend.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy
Bottom Line: The Sterling rally is approaching broader downtrend resistance near the 2019 / 2020 yearly highs and we’re looking for a reaction early in the month for guidance. From a trading standpoint, look to reduce long-exposure / raise protective stops on a probe higher here with a weekly close above 1.3194 needed to suggest a larger breakout is underway. Pullbacks should be limited to the yearly open at 1.3250 IF price is indeed heading higher. Review my latest Sterling Price Outlook for a closer look at the near-term GBP/USD technical trade levels.
![](https://a.c-dn.net/b/0YPMDo/logo-stripe.png)
![GBP Forecast](https://a.c-dn.net/b/29RUIr/500x707Forecast-GBP.png)
![GBP Forecast](https://a.c-dn.net/b/29RUIr/500x707Forecast-GBP.png)
Sterling Trader Sentiment - GBP/USD Price Chart
![Sterling Trader Sentiment - GBP/USD Price Chart - Cable Technical Forecast - Pound Outlook](https://a.c-dn.net/b/0zntb0/Sterling-Outlook-GBP-USD-Breakout-Targets-2019-2020-Yearly-Highs-British-Pound-Technical-Forecast-Cable-MBTS12_body_SterlingTraderPositioning-GBPUSDPriceChart-BritishPoundPositioning-CableOutlook-.jpg)
- A summary of IG Client Sentiment shows traders are net-short GBP/USD - the ratio stands at -1.42 (41.36% of traders are long) – weak bullish reading
- Long positions are16.54% higher than yesterday and 12.56% higher from last week
- Short positions are11.34% lower than yesterday and 4.74% lower from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBP/USD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current GBP/USD price trend may soon reverse lower despite the fact traders remain net-short.
Change in | Longs | Shorts | OI |
Daily | 3% | -7% | -3% |
Weekly | 4% | -10% | -5% |
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Key UK / US Data Releases
![Key UK / US Data Releases - GBP/USD Economic Calendar - Sterling Event Risk](https://a.c-dn.net/b/4cx6VZ/Sterling-Outlook-GBP-USD-Breakout-Targets-2019-2020-Yearly-Highs-British-Pound-Technical-Forecast-Cable-MBTS12_body_KeyUKUSDataReleases-GBPUSDEconomicCalendar-SterlingEventRisk12-1-2020.jpg)
Economic Calendar - latest economic developments and upcoming event risk.
Previous Weekly Technical Charts
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![Forex for Beginners](https://a.c-dn.net/b/20G9Td/500x707Beginner-ForexforBeginners.png)
![Forex for Beginners](https://a.c-dn.net/b/20G9Td/500x707Beginner-ForexforBeginners.png)
--- Written by Michael Boutros, Technical Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex