GBP/USD Outlook – February 8-12

Posted on February 6, 2010 by Yohay
Filed Under GBP/USD Forecast | 12 Comments

The Pound sure was a victim of the dollar’s storm, especially after the Non-Farm Payrolls. It’s at a nine-month low. The upcoming week consists of an important report by the BOE among other events. Here’s an outlook for British events and an updated technical analysis for GBP/USD.

GBP/USD chart with support and resistance lines marked on it. Click to enlarge:

GBP USD forecast

Mervyn King “missed” an opportunity to hurt the Pound in the rate decision. He’ll get another chance this week, with the release of the Inflation report. Also note the interesting NIESR GDP estimate. Let’s start the review. The technical analysis will follow:

  1. BRC Retail Sales Monitor: Published on Tuesday at midnight GMT. This figure is sometimes referred to as the “mini-retail sales”. The British Retail Consortium surveys its own members and gives an early indicator to the retail sales figure that is published later. In the past month it made a nice annualized rise of 4.2%. This time it’s predicted to be softer.
  2. RICS House Price Balance: Published on Tuesday at midnight GMT and slightly overshadowed by the previous figure. This housing price figure shows the balance between areas with rising prices and areas with dropping once. After reaching a peak of 35% in November, the balance fell back to 30%, and this week’s release is predicted to show another dip to 29%.
  3. Trade Balance: Published on Tuesday at 9:30 GMT. Britain has a steady deficit in the trade balance, squeezing in recent months. Last month’s 6.8 billion deficit is expected to be followed by 6.6 this time.
  4. Manufacturing Production: Published on Wednesday at 9:30 GMT. This major indicator of the economy remained unchanged in the past two months, disappointing the Pound. This time, a rise of 0.4% is predicted. Note that it’s accompanied by the general industrial production figure, but manufacturing, 80% of the industry, moves the markets more.
  5. BOE Inflation Report: Published on Wednesday at 10:30 GMT. This is an important quarterly event, in which the central bank projects the inflation and economic growth for a long time forward. Mervyn King dismissed the rising inflation after it almost got out of the government’s target. Will he continue this stance? With the release of the report, King will hold a press conference and will give a general look at the economy.
  6. NIESR GDP Estimate: Published on Thursday at 15:00 GMT. This independent institute foresaw the ongoing recession in Q3, and was more correct than economists on the poor Q4 growth rate. With a fresh monthly estimate, we’ll get to see how the British economy performed at the end of Q4 and in January 2010. This doesn’t always move the markets immediately, but has an impact on the mood.
  7. CB Leading Index: Published on Friday at 10:00 GMT. Although this compound figure is based on figures that were already released, it does give a good general picture and tends to move the Pound. Last month saw a rise of 0.9%, similar to previous months. A similar number will probably follow.

GBP/USD Technical Analysis

Continuing the fall from last week, the Pound traded in a range between 1.5833, December’s low, to 1.6070, which is a new resistance line (didn’t appear last week). Near the end of the week it collapsed, lost the 1.5833 and eventually the almighty 1.5720 line that wasn’t breached in 9 months. The close at 1.5640 is very bearish.

The first and most important resistance line is at 1.5720. Last time it got close to this line, the Pound climbed back in and made a nice comeback. Those days are gone.

Higher, 1.5833 and 1.6070 are the next resistance lines. 1.6270 is the next line, successfully working as such in the past weeks. There more lines above, but they’re too far now.

Looking down, strong support appears at 1.5350. This was the resistance line before the Pound broke upwards, and also served as a resistance line about one year ago.

Even lower, 1.50 played a role as a support and resistance line at the beginning of 2009. It’s also a round number. Even lower, 1.4350 is an important line of support, but the Pound is too far from it. At least now…

I’m bearish on the Pound

Despite some good signs from Britain, the loss of the important support line gets me back to the bearish sentiment. A speech by Mervyn King this week will probably weigh on the Pound as well.

Further reading:

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Comments

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12 Responses to “GBP/USD Outlook – February 8-12”

  1. forexcrunch on February 6th, 2010 5:03 pm

    $$ New post : GBP/USD Outlook – February 8-12 http://www.forexcrunch.com/gbpusd-outlook-february-8-12/

    This comment was originally posted on Twitter

  2. EBERE on February 7th, 2010 9:38 pm

    …A patient Dog eats the fattest BONE…What goes Up must come down at least on this planet earth…Last year USD had a FREE unstoppable fall…The TABLE has turned…EURO,CHF,GBP are falling like a REED in the WIND…Crashing irresistibly…FELLOW traders use your SENSE Make your MONEY now…Bye

  3. Pastor David Adeboye Afolayan on February 8th, 2010 4:04 pm

    You said the EURO,CHF GBP are falling like a Reed in the Wind. Is there any possibility of GBP recovering this week

  4. Pastor David Adeboye Afolayan on February 8th, 2010 4:21 pm

    You have not answered my first question, please do

  5. GREAT GUY on February 8th, 2010 9:07 pm

    pls ARE U THE REAL PASTOR ADEBOYE FROM NIGERIA?

  6. Pastor David Adeboye Afolayan on February 9th, 2010 2:32 am

    Yes i am the real Pastor David Adeboye Afolayan, kindly answer my question

  7. EBERE on February 9th, 2010 9:40 pm

    Yes i Said that EURO,CHF,GBP are falling…but are you a trader? if so can’t you see that they are falling…to answer your BIG question…Every definite fall MUST be followed by a rise…but a rise this time to be followed by yet another fall…be very CAREFUL on going BEARISH on USD …bye

  8. EBERE on February 9th, 2010 10:24 pm

    Pls i’m not the great guy that asked about your real identity you mistook me for him, i have been busy all the while…bye

  9. Pastor David Adeboye Afolayan on February 10th, 2010 5:39 am

    Yesterday GBP/USD had a bullish movement and ended around 1.5745. My question is are we expecting a further bullish movement today, thank you.

  10. dondepuedover on February 10th, 2010 9:40 am

    Donde puedo ver el partido de futbol online Zulia-Anzoátegui directo vivo hora futbol online gratis (http://bit.ly/92wLmn

    This comment was originally posted on Twitter

  11. EBERE on February 10th, 2010 10:30 am

    Very EXPENSIVE question…only HEAVEN knows the answer 100%…and passes the answer through our INTUITION…the BIG question is WHO is INTUITIVE?…but i can HELP you already GBP is selling but for how long?just keep checking your platform every one hour if you notice a sudden strong buy signal…then be prepared to buy but then again for how long?…be on your guard when trading sell on USD…bye

  12. ForexCandle on February 13th, 2010 7:35 pm

    GBP/USD Outlook – February 8-12 | Forex Crunch: The Pound sure was a victim of the dollar’s storm, especially afte… http://bit.ly/awZ9qj

    This comment was originally posted on Twitter

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