GBPUSD breaks out above multi-year resistance; eyes next swing zone while watching key short-term support for signs of fatigue
GBPUSD extended higher last week, breaking above the 2024 high at 1.3433 and clearing a key swing area between 1.3411 and 1.3513 (see red circles on the chart above). That zone had previously acted as both support and resistance on the weekly chart, with historical relevance dating back to 2018. The breakout now shifts focus to the next upside target: a swing zone between 1.3644 and 1.3746 -- another 100-pip band highlighted by prior swing highs from early 2022 and other significant levels going back to 2018 (see green circles).
With price action now well above key weekly retracements and moving averages, the trend bias remains firmly bullish. As long as GBPUSD continues to make new highs and hold above prior breakout zones, buyers remain in control. That said, bullish momentum may pause or correct at this next swing target area, where sellers could look to lean.
On the downside, the prior broken resistance zone between 1.3411 and 1.3514 now acts as support on the weekly chart. Below that, the next weekly downside target comes in at the 1.3545 to 1.3603 area.
Zooming into the hourly chart, a nearer-term support zone exists between 1.3512 and 1.3542. This area served as swing highs on Friday and early resistance in the Asian session today. A move below this level would be the first sign that sellers are attempting to regain control -- but a mere dip below is not enough. Price would need to stay below this zone and build downside momentum.
Further hourly support lies at:
Breaking and holding below both would give sellers more confidence and could shift the short-term bias more meaningfully.
Overall, the buyers are in control and stretching higher. Although the price is off the new high going back to 2022, there is work to do to take back even the smallest of control from the buyers. Without the aforementioned breaks lower, the buyers are still more in control.