Sterling Technical Price Outlook: GBP/USD Weekly Trade Levels
- Sterling technical trade level update – Weekly Chart
- GBP/USD break below uptrend support now challenging key technical pivot zone
- Support 1.3675, 1.36 & 1.3494- Resistance 1.3898 / bearish invalidation 1.3997
The British Pound plunged more than 1.4% against the US Dollar since the start of the week with GBP/USD now probing a key technical support pivot we’ve been tracking for months- risk for major price inflection here. 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 noted that, “the broader risk remains lower sub-1.40 with a break / weekly close below 1.3675 needed to fuel the next leg lower in the British Pound.” GBP/USD registered a high at 1.3983 before reversing with the decline now probing key support at 1.3675- looking for possible price inflection here.
A break / close lower keeps the focus on subsequent support objectives at the 52-week moving average near ~1.3609 and the 2017 high-week close / the median-line at 1.3794- look for a larger reaction there with a break risking a sharper decline towards critical support at the 61.8% Fibonacci retracement, the 2020 yearly open and the 100% ext at 1.3245-1.33. Initial weekly resistance now eyed at the April low-day close at 1.3742 backed by the July high-day reversal close / August open at 1.3890/98. Ultimately a breach above the 61.8% retracement of the late-May decline / 2018 high-week close at 1.3992/97 would be needed to mark resumption of the broader multi-year uptrend.
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 threatening a pivot below a key technical support zone at 1.3675. From a trading standpoint, a good zone to reduce short-exposure / lower protective stops – rallies should be capped by the 1.39-handle IF price is heading lower with a break here exposing subsequent support objectives into the median-line. I’ll publish and updated Sterling Price Outlook once we get further clarity on the near-term GBP/USD technical trade levels.
Sterling Trader Sentiment - GBP/USD Price Chart
- A summary of IG Client Sentiment shows traders are net-long GBP/USD - the ratio stands at +1.98 (66.44% of traders are long) – typically bearish reading
- Long positions are8.97% lower than yesterday and 15.32% higher from last week
- Short positions are10.13% lower than yesterday and 32.72% 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 further net-long than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger GBP/USD-bearish contrarian trading bias from a sentiment standpoint.
| Change in | Longs | Shorts | OI |
| Daily | 3% | -7% | -3% |
| Weekly | 4% | -10% | -5% |
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--- Written by Michael Boutros, Technical Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex
