The British Pound posted an outside-day reversal off slope support last week, shifting our near-term focus higher in price. The recovery has now pulled back from the monthly open and IF prices are indeed heading higher, this decline may offer near-term entries on the long-side. These are the updated intraday targets & invalidations levels that matter for GBP/USD.
GBP/USD DAILY PRICE CHART
Technical Outlook: In last week’s Technical Perspective on the British Pound, we highlighted a confluence support zone in GBP/USD around ~1.3164, “This region is defined by the 50% retracement of the post-Brexit advance and converges on the lower median-line parallel & basic trendline support extending off the 2017 lows.” We noted that IF prices were going to recover- this would be a “good spot” with daily RSI divergence further highlighting the risk for a near-term recovery.
Sterling rallied more than 1.6% off the lows last week before pulling back from monthly open resistance at 1.3290. A rally surpassing the 61.8% retracement of the monthly range at 1.3330 would be needed to suggest a more significant low is in place and validate a breakout with such a scenario targeting confluence resistance into the 1.35-handle. A downside break of this range keeps the broader short-bias in play targeting the lower parallel / October low at 1.3027.
GBP/USD 240MIN PRICE CHART
Notes: A closer look at Sterling price action highlights last week’s reversal off descending pitchfork support with price closing just below the monthly open at 1.3290– note that this level also represents the objective weekly opening-range high. A breach above this threshold keeps the focus higher targeting subsequent resistance objectives at 1.3330, the trendline confluence around 1.3360 and the 76.4% retracement at 1.3384. Interim support rests at 1.3203/08 with our near-term bullish invalidation level steady at 1.3164.
