GBP/USD Technical Outlook: Sterling Nearing Big Breakout Level vs Dollar
- 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
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/USD Weekly Chart (13500/2007 trend-line)
GBP/USD Daily Chart (breakout this time?)
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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.