British Pound Technical Forecast: Bearish
British Pound Talking Points:
- The British Pound fell against both the US Dollar and Japanese Yen this week.
- But, Sterling also gained against commodity currencies such as AUD and CAD.
- The stage is set for volatility next week with US Elections and NFP; but not to get lost in the shuffle is a Bank of England rate decision on the calendar for Thursday morning.
GBP/USD: Cable Gives Up 1.3000 Support as USD Jumps Ahead of the Election
GBP/USD came into the week with a support test at a familiar area, around the 1.3000 psychological level that showed multiple iterations of resistance in September after coming up as support in August.
This instance, however, saw sellers push through that support as a really strong US Dollar took over. This allowed for a downside break of the bullish channel that’s been building since early-September. Support showed up at 1.2896, which is the 50% marker of the 2018-2020 major move; at which point the sell-off slowed and a shallow retracement developed. Current resistance going into the weekend appears to be showing around 1.2983, which is the 38.2% Fibonacci retracement of the September major move, and this can keep the door open for short-side continuation scenarios.
GBP/USD Technical Forecast: Bearish
GBP/USD Four-Hour Price Chart
Chart prepared by James Stanley; GBPUSD on Tradingview
GBP/JPY Finds Fibonacci Resistance
Given the risk aversion flying off across global markets and GBP/JPY similarly saw a week of weakness. The big technical event here this week was re-crossing below the psychological 135.00 level, albeit temporarily. The pair first started to re-engage with that level on Wednesday, followed by another touch on Thursday and a more concerted later in the day.
Sellers were unable to hold it below, however, and in a Friday retracement price action pushed back to find resistance at a familiar Fibonacci level plotted around 135.87. This is the 61.8% retracement of the 2016-2018 major move in the pair, and this can help to keep the door open for short-side scenarios in the pair for next week.
GBP/JPY Technical Forecast: Bearish
GBP/JPY Four-Hour Price Chart
Chart prepared by James Stanley; GBPJPY on Tradingview
GBP/AUD Stifled at Psych Level as Bulls Aim for Continued Recovery
Sterling wasn’t bearish everywhere last week as commodity currencies were hit even harder; evidenced by the third consecutive week of gains in GBP/AUD. From the Daily chart, that bullish trend potential continues to show as last week’s higher-high was coupled with this week’s higher-low. The current point of resistance appears to be around the 1.8500 psychological level with support coming in around the 23.6% marker at 1.8226.
The continued tests of resistance combined with a series of higher-lows and a recent higher-high keeps the door open for topside continuation in the pair and, accordingly, the forecast will be set to bullish for the week ahead.
GBP/AUD Technical Forecast: Bullish
GBP/AUD Daily Price Chart
Chart prepared by James Stanley; GBPAUD on Tradingview
GBP/CAD: Fresh Monthly Highs
GBP/CAD was similarly backed by a pattern of strength this week as the British Pound outpaced the Canadian Dollar. Perhaps a bit more attractive, however, is the fact that GBP/CAD set a fresh seven-week-high on Thursday while GBP/AUD remained restrained under that 1.8500 level.
To be sure, the setup here is a bit less orderly than the bullish trend looked at above in GBP/AUD; but this week did see the pair stick to a string of higher-lows to go along with that fresh higher-high, thereby allowing for the door to remain open to topside continuation scenarios for next week.
GBP/AUD Technical Forecast: Bullish
GBP/CAD Four-Hour Price Chart
Chart prepared by James Stanley; GBPCAD on Tradingview
— Written by James Stanley, Strategist for DailyFX.com
Contact and follow James on Twitter: @JStanleyFX