Ahead of this week’s wages/employment data and CPI inflation print, the technical position for the GBP/USD leans in favour of bears.

Monthly Resistance Continues to Attract Selling

Kicking off with a look at the monthly chart, the currency pair continues to test the mettle of resistance at $1.2715, ending marginally lower for a second straight week. The overall longer-term picture reflects a downtrend, and the pullback from historic lows of $1.0539 in September 2022 could still be viewed as a long-term sell-on-rally scenario. Whether we’ll see lows as far south as $1.0539 in the foreseeable is debatable, but the fact remains that we are trending south, and that price is fading monthly resistance. As a result, support may call for attention at $1.2173 over the coming months.

Range Support Vulnerable on the Daily

Out of the daily timeframe, since late 2023 we have been rangebound between $1.2540 and $1.2763, with last week recoiling from the lower boundary of said range. Aside from a 61.8% Fibonacci retracement ratio at $1.2721, limited mid-range resistance is seen until the upper boundary at $1.2763. Technically, a pullback to the resistances might be seen, though ultimately, given where the unit is coming from on the monthly chart, a breakout below the daily consolidation is also firmly on the table.

So, with the monthly suggesting lower prices and the daily echoing a vulnerable range low, short-term traders may enter the week in pursuit of a bearish scenario.

Two H1 Resistances Eyed This Week

On the H1 timeframe, the resistance between $1.2648 and $1.2642 has proven popular in February, withstanding a number of upside attempts. With price recently unable to conquer the $1.26 support, a whipsaw of the resistance area might be seen to test neighbouring resistance at $1.2653 (a move that may attract sellers). Alternatively, should sellers fail to demonstrate much interest here and a breakout higher forms, resistance between $1.2721 and $1.2700 could be an area sellers are drawn to this week (note that the upper edge of the resistance is joined with the daily timeframe’s 61.8% Fibonacci retracement ratio).

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