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GBP/USD Technical Outlook: Sterling Nearing Big Breakout Level vs Dollar

GBP/USD Technical Outlook: Sterling Nearing Big Breakout Level vs Dollar

Paul Robinson, Strategist

GBP/USD Highlights:

  • GBP/USD trading towards the wall at 13500
  • A breakout could send it much higher
  • EU/UK talks swaying price action, could determine make or break
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GBP/USD is on the move higher again after a see-saw type of trading week due to swaying sentiment surrounding the EU/UK trade talks. This of course could play a major part in how the big 13500-area is treated as it quickly approaches.

From a technical standpoint it is one of the bigger levels out there in FX-land, with the origins of resistance dating back to the GFC low in 2009. Since then the level has acted as a ceiling in December 2019 and August of this year.

In relative confluence, although due to time this isn’t so much the case anymore, lies the trend-line from the 2007 high. Regardless of whether it is in exact confluence or not, it is an important threshold that on a intra-week basis has been crossed. The key will be whether it can close above it to count as a break.

That will be one positive, but to really get cable trading higher we need to see a closing weekly candle above 13514. A close above major horizontal resistance and the long-term trend-line could clear a path for much higher prices.

The next significant area to worry about in that case might not arrive until the 2018 highs in the vicinity of 142/4400. However, resistance is resistance until it’s not, and that means we could still see another turn lower. An outcome towards lower levels appears likely to be less decisive than a breakout would be.

The bottom line is that GBP/USD is trading near a big level that could have a significant hand in how we shape our trading bias for the foreseeable future. Brexit talks appear to be nearing their end so we may have that resolution very soon.

GBP Forecast
GBP Forecast
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Check out the Q4 GBP Forecast
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GBP/USD Weekly Chart (13500/2007 trend-line)

gbp/usd weekly chart

GBP/USD Chart by TradingView

GBP/USD Daily Chart (breakout this time?)

gbp/usd daily chart

GBP/USD Chart by TradingView

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---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX

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

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