British Pound Breakout Trade- GBP/USD Levels

Sterling Technical Price Outlook: Near-term Trade Levels

• Sterling technical trade level update – Daily & Intraday Charts
• GBP/USD near-term breakout testing first major resistance targets
• British Pound constructive while above today’s low

The British Pound surged nearly 1% against the US Dollar since the start of the week with Sterling targeting initial resistance on this near-term breakout. These are the updated targets and invalidation levels that matter on the GBP/USD price charts. Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Cable trade setup and more.

Sterling Price Chart – GBP/USD Daily

Chart Prepared by Michael Boutros, Technical Strategist; GBP/USD on Tradingview

Technical Outlook: In my latest Sterling Price Outlook we noted that the GBP/USD pullback was, “trading just above multi-month uptrend support and the immediate focus is on a reaction down here.” The threshold in focus was the Oct 17th swing high at 1.2990- price briefly registered a low last week at 1.2952 before rebounding with another failed attempt early this week giving way to a larger breakout the British Pound.

The advance is now eyeing the first major resistance hurdle at the 61.8% retracement of the decline off the late-December high at 1.3157– we’re looking for reaction here. The focus is higher while above today’s low / trendline support around 1.3030/36 with a close below 1.2990 still needed to put the bears in control. A topside breach from here exposes subsequent daily resistance objectives at the yearly open at 1.3253 and 1.3281/84– look for a bigger reaction there IF reached.

Sterling Price Chart – GBP/USD 120min

Notes: A closer look at Sterling price action shows GBP/USD trading within the confines of a near-term ascending pitchfork formation extending off the monthly lows. Note that the upper parallel and the 100% extension of the weekly rally further highlighting near-term resistance at 1.3157 – the immediate advance may be vulnerable into this threshold.

Initial support rests at the median-line, currently around 1.3080 backed by near-term bullish invalidation at 1.3036 – both levels of interest for possible downside exhaustion / long-entries IF reached. A breach keeps the focus on topside targets at 1.3213, 1.3253 and the late-December high / 61.8% retracement of the decline off the 2019 high at 1.3281/84.

Recommended by Michael Boutros

Download our latest quarterly GBP/USD Price Forecast

Bottom line: The Sterling breakout is testing the first major resistance zone into 1.3157 and leaves the immediate advance vulnerable while below this threshold. From a trading standpoint, a good spot to reduce long-exposure / raise protective stops – be on the lookout for possible exhaustion on pullbacks while above 1.3030 with a breach higher keeping the focus on yearly-open resistance. Review my latest British Pound Weekly Price Outlook for a closer look at the longer-term GBP/USD technical trade levels.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

Sterling Trader Sentiment – GBP/USD Price Chart

• A summary of IG Client Sentiment shows traders are net-long GBP/USD – the ratio stands at +1.24 (55.44% of traders are long) – weak bearish reading
• Long positions are11.58% lower than yesterday and 22.46% lower from last week
• Short positions are7.02% higher than yesterday and 17.55% higher 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. Yet traders are less net-long than yesterday & compared with last week and the recent changes in sentiment warn that the current GBP/USD price trend may soon reverse higher despite the fact traders remain net-long.

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– Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex