In the US, Retail Sales, an important gauge of consumer spending measuring the total receipts at retail establishments expected a modest decline of -0.1% due to last week’s better-than-expected sales at some major U.S. retailers. This report could also show signs of improvement from the -1.2% drop in May.

More in the US, Federal Open Market Committee Meeting Minutes a detailed record of the Fed’s last monetary policy meeting that may provide an outlook on the economy, inflation and the Fed’s future monetary policy. The minutes would likely confirm the Fed’s cautiously optimistic outlook on the economy and the monetary policy makers.

Later in the US, Import Prices, Following the 0.6% decrease in May, a further smaller 0.1% drop is expected. Subdued inflation will give the Federal Reserve room to keep its benchmark interest rate near zero for an “extended period.”

Finally in the US, Business inventory growth fell to 0.4% in April reverting a 3-month trend of increasing growth which ended in a 0.7% monthly spike in March. A similar growth is forecasted now. Crude oil inventories fell 2 million barrels in the week ending June 25, following a rise of 2 million barrels the preceding week a further decrease is expected.

For more on USD/CAD, read the Canadian dollar forecast.

In Europe, Euro-zone Industrial Production, the main gauge of industrial activity measuring the output of factories, mines and utilities is forecasted to rise by 1.2% from 0.8% in May. The manufacturing sector has been the leading light of the Euro-zone economy so far in 2010, benefiting from improved domestic and, especially, export demand as well as inventory rebuilding.
More in Europe, Consumer Price Index expected to remain flat at 1.4% y/y while the Core CPI increases slightly by 0.9% m/m from 0.8% in May.

For more on the Euro, read the EUR/USD forecast and Casey Stubbs’ latest analysis.

In Great Britain, U.K. Jobless Claims and Unemployment Rate, the main gauges of employment trends and labor market conditions expected lesser 20,200 jobless claims in June than the 30,900 claims in May and may bring a positive improvement in the U.K. jobs market. The unemployment rate remains unchanged at 7.9%.
More in Great Britain, Average Earnings Index is an indicator of how fast earnings are growing in Great Britain. A further 3.1% rise is expected in May following the 4.2% climb in April exemplifying an overall positive growth climate in the UK market.

Read more about the Pound in the GBP/USD forecast.

In Australia, RBA Governor Glenn Stevens delivers a speech titled “Some Long-Run Effects of the Financial Crisis” at the Anika Foundation Luncheon, in Sydney. His comments may determine whether inflation rates will increase over the next year.

More in Australia, Westpac Consumer Sentiment Index fell by 5.7% in June from 108.0 in May to 101.9 in June. Another decrease is anticipated if the Reserve Bank will continue to raise rates.

For more on the Aussie, read the AUD/USD forecast.

In New Zealand, The BNZ-Business NZ Performance of Manufacturing Index provides an early indicator of activity levels, with May’s 54.5 index showing expansion, even though it is down 4.1 points from April. Manufacturing activity is anticipated to continue its growth and stay above the 50 point line.
That’s it for today. Happy forex trading!

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A busy week expects cable traders: inflation, employment and Final GDP are part of the events that will shake the Pound this week. Here’s an outlook for the British events and an updated technical analysis for GBP/USD.

GBP/USD daily chart with support and resistance lines. Click to enlarge:

In the past week, the Pound traded in a tight range, and didn’t fall during most of the week, despite many bad economic indicators that were released in the UK. The fall began only on Friday. Will it continue? Let’s start:

1. Final GDP: Published on Monday at 8:30 GMT, delayed from two weeks ago. The initial release of GDP for Q1 was very disappointing – a growth rate of only 0.1% caused fears of a new recession. But the revision already showed a 0.3% rise, and this will probably be confirmed now. Britain’s economy is still very vulnerable, with the European debt issues still having an impact on the UK. This release will rock the Pound.
2. Current Account: Published on Monday at 8:30 GMT and slightly overshadowed by the GDP release. Britain’s deficit is expected to grow from 1.7 to 3.9 billion pounds. A rise in the deficit was also seen in the related figure – trade balance, and already took its toll on the pair.
3. BRC Retail Sales Monitor: Published on Monday at 23:00 GMT (midnight UK). This release gives a good idea about retail sales, as it’s a subset of the total figure. After a drop of 2.3% two months ago, sales rose by 0.8% last month. Another small rise is expected now.
4. RICS House Price Balance: Published on Monday at 23:00 GMT. This indicator shows the balance between areas that see a rise in house prices and the areas that see drops. This indicator recovered and reached a positive balance of 22% last month, but similar housing indices show a probable drop this time.
5. CPI: Published on Tuesday at 8:30 GMT. Inflation passed the government’s 1-3% target in the past 5 months, reaching an annual rate of 3.7% at the peak. It then eased to 3.4% and it’s now expected to drop to 3.2%. One MPC member, Andrew Sentance, already wants a rate hike, but this didn’t happen yet. A drop under 3% will reduce the chances of a hike and will hurt the Pound. Core CPI is also expected to ease from an annual rate of 2.9% to 2.7%. RPI (Retail Price Index), which often reflects better what customers feel, will probably drop from 5.1% to 4.9%.
6. Nationwide Consumer Confidence: Published on Tuesday at 23:00 GMT, delayed from last week. The Nationwide Building Society usually releases this report before the rate decision, but the delay gives it a different perspective. After hitting a peak at 81 points, it fell down to 65 points, and is expected to tick down to 64 points this time.
7. Employment data: Published on Wednesday at 8:30 GMT. Claimant Count Change, is the earliest report on employment in the UK, and shows the changed in the number of unemployed people. In the past 4 months, it has dropped significantly, surprising economists. After the 30.9K drop seen last month, a more modest drop of 20.3K is predicted this time. The unemployment rate, which relates to the month of May,  is expected to remain unchanged at 7.9%. Also note the Average Earnings Index, which is likely to rise at an annual rate of 3.1%, less than last month’s 4.2%.
8. Housing Equity Withdrawal: Published on Friday at 8:30 GMT. In this quarterly report, the Bank of England shows the change in the value of mortgages that aren’t used for housing. A squeeze of 3.1 billion is expected to follow last month’s 4 billion drop.

GBP/USD Technical Analysis

EUR/USD extended its gains in the past week, edging up to new levels. But is this sustainable? The pair cannot rally solely on weak US data. We have a major German survey this week. Let’s start:

That’s it for the major events this week. Stay tuned for coverages on specific currencies.

Further reading:

• For EUR/USD, check out  the Euro/Dollar Forecast.
• For GBP/USD  (cable), look into the British Pound forecast.
• For the Australian dollar (Aussie), check out the AUD/USD forecast.
• For the New Zealand dollar (kiwi), read the NZD/USD forecast.
• For USD/CAD (loonie), check out the Canadian dollar forecast.

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In the US, Building Permits expected to rise this month by 20,000 units following the unpredicted drop to 0.61M in the previous month while Housing Starts anticipated to drop by 20,000 reaching 0.65M.

Later in the US, Producer Price Index predicted to decrease from -0.1% to -0.5% and Core PPI also expected to drop from 0.2% to 0.1% ensuring low inflation rates.

More in the US, Federal Reserve Chairman Ben Bernanke speaks about “Financial Reform” at the Conference on the “The Squam Lake Report: Fixing the Financial System,” in New York. This can affect the currency.

Finally in the US, Capacity Utilization Rate expected to continue its consistent growth reaching 74.6% which may affect inflation rates in case of additional increase, Industrial Production is also expected to climb to 0.9% following the positive rise from previous month and Crude Oil Inventories predicted to increase by 0.3M from -1.8M in May.

In Canada, BOC Governor Mark Carney speaks at the Area Chamber of Commerce, in Charlottetown.

For more on USD/CAD, read the Canadian dollar forecast.

In Europe, Consumer Price Index is expected to remain 1.6% as in May and the Core CPI is also anticipated to maintain 0.8%.

For more on the Euro, read the EUR/USD forecast and Casey Stubbs’ latest analysis.

In Great Britain, BOE Governor Mervyn King speaks at the Mansion House, in London and may affect the currency.

More in Great Britain, Claimant Count Change measuring the change in the number of people claiming unemployment-related benefits during the previous month is expected to drop -23.2K which is 3,900 higher than the previous month.

Later in Great Britain, Average Earnings Index representing 3-month moving average expected to rise by 0.4% since May 4.0% indicating a rise in consumer inflation.

Read more about the Pound in the GBP/USD forecast.

In Switzerland, ZEW Economic Expectations a survey rating relative 6-month economic outlook for Switzerland is expected to remain around 40.5 points.

In Australia, MI Leading Index is hoped to maintain the rating of 0.9% as in the previous month.

For more on the Aussie, read the AUD/USD forecast.

In Japan, Bank of Japan Monthly Report is issued may affect interest rates and provide information regarding future monetary policy.

That’s it for today. Happy forex trading!

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We see a growing gap between the commodity currencies and the rest of the world. Australia enjoys a great job market, the rate has been lifted in New Zealand, and Canada is doing well on all parameters. This week will be mostly about the US. Let’s start:

1. Japanese rate decision: On Tuesday morning. The BOJ isn’t expected to change the rock-bottom Overnight Call Rate of 0.1%, but the rate statement, and especially the press conference afterwards, will probably trigger interesting statements about the state of the economy. Officials in the new Japanese government warned that Japan could face a “Greek-style” debt crisis. Are they trying to aggressively weaken the Yen?
2. British CPI: Published on Tuesday at 8:30 GMT. The new British Prime Minister, David Cameron, said that inflation must be tackled. The current level of 3.7% is above the government’s target of 1-3%, and this isn’t expected to changed. CPI is expected to tick down to 3.5%. Mervyn King, the BOE’s governor, dismissed inflation until now. Raising the rates while the economy is struggling isn’t tempting. King and other senior members will speak in front of the Treasury Committee about inflation.
3. German ZEW Economic Sentiment: Published on Tuesday at 9:00 GMT. This survey of 350 analysts and investors is highly regarded and has a strong impact on the Euro. The forecast is for a slight recovery, from 45.8 to 48.7, after the initial wave of the contagious European debt problems. Note that there’s also an all-European figure, but the German one tends to have more impact.
4. American TIC Long-Term Purchases: Published on Tuesday at 13:00 GMT. This indicator shows the flow of money into our out of the US, being a sign of confidence. The turmoil in Europe, as last month saw a huge leap  - 140 billion instead of 50 that was predicted. The safe haven status that the US has will probably be reflected in this figure once again.
5. British employment data: Published on Wednesday at 8:30 GMT. The number of unemployed people, as seen in the Claimant Count Change, dropped significantly in the past three months, exceeding expectations time after time. While this is good for the Pound, the complementary figure, unemployment rate, which is a lagging figure, rose to 8% and isn’t expected to move from there.
6. European inflation data: Published on Wednesday at 9:00 GMT. Also in Europe, prices are rising, but the inflation rate isn’t a headache for the ECB, not yet. CPI is expected to show an annual rise of 1.6% and Core CPI a rise of only 0.8%. Any surprise will shake the Euro.
7. American housing figures: Published on Wednesday at 12:30 GMT. Building permits disappointed last month as they weakened to 610K. A rise to 630K is expected now. A rise above 700K will convince the markets that the recovery is strong. Housing starts reached a higher level, 670K, but they’re expected to drop this time to 650K. Together with the PPI, this time is very volatile for the dollar.
8. American PPI: Published on Wednesday at 12:30 GMT. Producer prices fell last month by 0.1%, and this fall is expected to accelerate this month to 0.5% – this is mainly the result of the drop in oil prices. Core PPI, which the Federal Reserve closely watches, is also expected to be tame – 0.1%. No inflation pressures from here.
9. Swiss rate decision: Published on Thursday at 7:15 GMT. The Swiss National Bank makes a decision on the Libor Rate only once a quarter. No change is expected this time, so the focus will be on the accompanying release of the SNB Monetary Policy Assessment. Will the central bank express concerns about the currency? After the fall of the Japanese government, the Swissy got some renewed attention as a safe haven currency. The low levels of EUR/CHF could trigger an intervention, and this might happen together with the rate decision, as seen in the past.
10. American CPI: Published on Thursday at 12:30 GMT. The main inflation figure isn’t expected to be different than producer prices. CPI is expected to drop by 0.2% and Core CPI will probably rise by 0.1% – Bernanke will probably leave the wording about “interest rates being low for an extended period of time” once again, weakening the dollar.
11. American Unemployment Claims: Published on Thursday at 12:30 GMT. Last week saw another disappointment, as jobless claims are refusing to go down. This week isn’t expected to be different – the forecast is for a minor drop from 456K to 454K.
12. American Philly Fed Manufacturing Index: Published on Thursday at 14:00 GMT. This major gauge has risen steadily in recent months, reaching 21.4 points. This trend will probably stop. The global turmoil will probably take its toll on this indicator.

That’s it for the major events this week. Coverages for specific currencies will follow.

Further reading:

• For the Euro/Dollar, look into the EUR USD Forecast.
• For the British Pound (sterling), read the GBP/USD forecast.
• For the Australian dollar (Aussie), check out the AUD/USD forecast.
• For the New Zealand dollar (kiwi), read the NZD/USD forecast.
• For USD/CAD (loonie), check out the Canadian dollar forecast.

Want to see what other traders are doing in real accounts? Check out Currensee. It’s free.

A very busy week expects cable traders: inflation, employment and retail sales are the highlights. Here’s an outlook for the major events in Britain and an updated technical analysis for GBP/USD.

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

The bigger deficit in the trade balance was one of the weights on the Pound, and Friday’s Manufacturing was another blow, as the rate decision didn’t supply any news. This week has a major indicator every day. Let’s start:

1. Nationwide Consumer Confidence: Publication time unknown at the moment, delayed from last week. After steadily climbing to 81, this indicator dropped and now stands on 74 points. This is the first survey for the new government and also the first one after the escalation of the European troubles. Economists expected a rise to 78 points, but given the worries, a drop under 70 won’t be very surprising.
2. BOE Quarterly Bulletin: Published on Sunday at 23:00 GMT (midnight UK). The Bank of England releases its opinions on the current economic developments and thoughts about the future. Any concerns about the government deficit that will be cited by the media could hurt the Pound.
3. Adam Posen talks: Starts speaking on Monday at 21:00 GMT. This influential member of the MPC will speak about inflation in a conference in New York, about 12 hours before the release of inflation data. It will be interesting to hear what he thinks about inflation – does he disregard it, or is he worried and wants a rate hike?
4. RICS House Price Balance: Published on Monday at 23:00 GMT. The Royal Institution of Chartered Surveyors publishes the balance between areas that see a rise in house prices and the ones that see a drop. The positive balance has squeezed in recent months, but recovered to 17% last time. A small drop to 16% is expected this time.
5. CPI: Published on Tuesday at 8:30 GMT. Inflation is becoming a problem in Britain. The government’s 1-3% target wasn’t met in the past 4 months. Mervyn King dismissed it, and blamed the rise on fuel prices, but the new Prime Minister, David Cameron, is worried and called the central bank to tackle it – raise the interest rate. Any result will rock the Pound. CPI is expected to edge down from 3.7% to 3.5%, Core CPI is predicted to tick down from 3.1% to 3% and the forecast for the RPI (Retail Price Index), is a drop from 5.3% to 5%.
6. Inflation Report Hearings: Begins on Tuesday at 9:00 GMT. Just 30 minutes after the fresh inflation data is released, Mervyn King and a few of his associates will appear before the new Treasury Committee in parliament and will testify about inflation, the economic situation and the budget which the Cameron wants to cut. During the many hours of debate, the quotes that they’ll release will rock the currency.
7. Employment data: Published on Wednesday at 8:30 GMT. The number of unemployed people, as seen in the Claimant Count Change, dropped significantly in the past three months, exceeding expectations time after time. Another drop of 25,300 is expected now, similar to last month’s number. While this is good for the Pound, the complementary figure, unemployment rate, which is a lagging figure, rose to 8% and isn’t expected to move from there – this figure is quoted by the media and has a strong impact on politicians. Also note the Average Earnings Index, which combine inflation and employment – they’re expected to be Pound-positive, rising by 4.4%, the biggest rise in many years.
8. Mervyn King talks: Starts speaking on Wednesday at 21:45 GMT. Just a few hours after the appearance in parliament, King will have another opportunity to speak his mind, attending an event at the Mansion House in London. This can supply volatility for the Pound, in a usually quiet hour in the markets.
9. Retail Sales: Published on Thursday at 8:30 GMT. This major consumer related figure rose at low rates in the past two months, similar to the weak growth of the economy. Yet again, consumers are expected to show more caution this time, with a minor rise of 0.1%. A drop will hurt the Pound.
10. CBI Industrial Order Expectations: Published on Thursday at 10:00 GMT. The Confederation of British Industry paints a more pessimistic picture of the economy. This figure has been negative, meaning lower order volume expected for the past two years, but at least there’s been some improvement. A rise from -18 to -15 is expected now.
11. Public Sector Net Borrowing: Published on Friday at 8:30 GMT.  The public sector has been lending quite high in recent months, causing worries at home and overseas. From 10 billion pounds last month, this number is expected to leap up to 18 billion this time.
12. Mortgage Approvals: Published on Friday at 8:30 GMT. The is the official and initial release approvals of this important housing sector figure. 50,000 approvals were reported last month, and this is expected to be followed by a small drop to 49,000. All in all, this figure has been rather steady.

GBP/USD Technical Analysis

In the US, Trade Balance is expected to increase trade deficit by $200,000,000 from 39.7B in the previous month indicating a rebound in economic growth.

Later in the US, Federal Reserve Bank of St Louis President James Bullard speaks about the economy at the Tennessee Department of Financial Institutions, in Nashville and Federal Reserve Bank of Boston President Eric Rosengren participates in a panel discussion titled “Up from the Ashes: The Financial System After the Crisis” at the Federal Reserve’s 2010 Financial Markets Conference, in Atlanta. Future monetary policy and key interest rates are to be affected.

Finally in the US, Crude Oil Inventories will probably rise by another 2.8M this month.

The US federal budget deficit is expected another dramatic decline of 43.9B from the previous -65.4B deficit which is Good news for the US economy.

In Canada, Trade Balance is positive once again, showing an estimated rise of 0.3B in trade surplus from 1.4B in the previous month, indicating a recovery of Canada’s trade sector from the global recession.

More in Canada, New Housing Price Index measuring change in the selling price of new homes is expected to edge up to 0.4% from 0.1% in the previous month indicating a lively activity in the housing industry.

For more on USD/CAD, read the Canadian dollar forecast.

In Europe, German Preliminary Gross Domestic Product is expected to remain 0.0% brings Europe’s largest economy to a standstill after the rise in previous quarters. The French Preliminary Gross Domestic Product is also negative expecting a decline of 0.3% from 0.6% in the previous quarter and its CPI is also heading for a drop from 0.5% to 0.2%. On the other hand, Italian Prelim GDP expects a rise of 0.3% after the previous drop of -0.3% and EU’s Flash GDP is expected to grow by 0.1% from 0.0% in the previous quarter.

Also in Europe, Industrial Production is likely to rise by 0.4%

Finally in Europe, Producer Price Index is expected a slight drop of 0.1% after the rise of 0.5% in the previous month.

For more on the Euro, read the EUR/USD forecast and Casey Stubbs’ latest analysis.

In Great Britain, Claimant Count Change shows a decrease of 12800 in the number of people claiming unemployment-related benefits this month. This is a good indicator of economic health. Nevertheless Unemployment Rate is expected to remain 8.0%.

More in Great Britain, Bank of England Inflation Report, released quarterly, is issued and the bank’s Governor Mervyn King will hold a press conference, along with other MPC members, about the Inflation Report, in London. This should affect rate interests and future monetary policy.

Later in Great Britain, Average Earnings Index, released monthly represents the 3-month moving average compared to the same period a year earlier shows an expected drop of 0.1% from the previous report.

Finally in Britain, Nationwide Consumer Confidence is foreseen a rise of 2 points from 72 points in the previous month, a positive sign for overall economic activity.

Read more about the Pound in the GBP/USD forecast.

In Australia, The number of new loans granted for owner-occupied homes this month is expected to drop by -2.9% following the drop in previous months despite predictions for economic growth in 2010.

For more on the Aussie, read the AUD/USD forecast.

In New Zeeland, Business NZ Manufacturing Index is likely to remain around 56.3 points and the Food Price Index is also expected to remain in proximity to 0.2%.

In Japan, Leading Indicators are predicted to rise by 0.9% from 98.5%, Current Account is also expected a positive rise of 0.37T. the M2 Money Stock measuring the change in the total quantity of domestic currency in circulation and deposited in banks is on the fall for three consecutive months estimated a 2.5% rise 0.1% less then in the previous month. Japan’s Bank Lending measuring change in the total value of outstanding bank loans issued to consumers and businesses will most likely remain in the neighborhood of -1.8%.  

That’s it for today. Happy forex trading!

Want to see what other traders are doing in real accounts? Check out Currensee. It’s free. 

Later in the US, Federal Reserve Bank of St Louis President James Bullard speaks about the economy at the Tennessee Department of Financial Institutions, in Nashville and Federal Reserve Bank of Boston President Eric Rosengren participates in a panel discussion titled “Up from the Ashes: The Financial System After the Crisis” at the Federal Reserve’s 2010 Financial Markets Conference, in Atlanta. Future monetary policy and key interest rates are to be affected.

Finally in the US, Crude Oil Inventories will probably rise by another 2.8M this month.

The US federal budget deficit is expected another dramatic decline of 43.9B from the previous -65.4B deficit which is Good news for the US economy.

In Canada, Trade Balance is positive once again, showing an estimated rise of 0.3B in trade surplus from 1.4B in the previous month, indicating a recovery of Canada’s trade sector from the global recession.

More in Canada, New Housing Price Index measuring change in the selling price of new homes is expected to edge up to 0.4% from 0.1% in the previous month indicating a lively activity in the housing industry.

For more on USD/CAD, read the Canadian dollar forecast.

In Europe, German Preliminary Gross Domestic Product is expected to remain 0.0% brings Europe’s largest economy to a standstill after the rise in previous quarters. The French Preliminary Gross Domestic Product is also negative expecting a decline of 0.3% from 0.6% in the previous quarter and its CPI is also heading for a drop from 0.5% to 0.2%. On the other hand, Italian Prelim GDP expects a rise of 0.3% after the previous drop of -0.3% and EU’s Flash GDP is expected to grow by 0.1% from 0.0% in the previous quarter.

Also in Europe, Industrial Production is likely to rise by 0.4%

Finally in Europe, Producer Price Index is expected a slight drop of 0.1% after the rise of 0.5% in the previous month.

For more on the Euro, read the EUR/USD forecast and Casey Stubbs’ latest analysis.

In Great Britain, Claimant Count Change shows a decrease of 12800 in the number of people claiming unemployment-related benefits this month. This is a good indicator of economic health. Nevertheless Unemployment Rate is expected to remain 8.0%.

More in Great Britain, Bank of England Inflation Report, released quarterly, is issued and the bank’s Governor Mervyn King will hold a press conference, along with other MPC members, about the Inflation Report, in London. This should affect rate interests and future monetary policy.

Later in Great Britain, Average Earnings Index, released monthly represents the 3-month moving average compared to the same period a year earlier shows an expected drop of 0.1% from the previous report.

Finally in Britain, Nationwide Consumer Confidence is foreseen a rise of 2 points from 72 points in the previous month, a positive sign for overall economic activity.

Read more about the Pound in the GBP/USD forecast.

In Australia, The number of new loans granted for owner-occupied homes this month is expected to drop by -2.9% following the drop in previous months despite predictions for economic growth in 2010.

For more on the Aussie, read the AUD/USD forecast.

In New Zeeland, Business NZ Manufacturing Index is likely to remain around 56.3 points and the Food Price Index is also expected to remain in proximity to 0.2%.

In Japan, Leading Indicators are predicted to rise by 0.9% from 98.5%, Current Account is also expected a positive rise of 0.37T. the M2 Money Stock measuring the change in the total quantity of domestic currency in circulation and deposited in banks is on the fall for three consecutive months estimated a 2.5% rise 0.1% less then in the previous month. Japan’s Bank Lending measuring change in the total value of outstanding bank loans issued to consumers and businesses will most likely remain in the neighborhood of -1.8%.  

That’s it for today. Happy forex trading!

Want to see what other traders are doing in real accounts? Check out Currensee. It’s free.

Echoes from the British general election will continue to accompany us, but the important British indicators will slowly take over the scene. In Europe, the never-ending debt issues will also have a strong impact. OK, let’s start:

1. British rate decision: Published on Monday 11:00 GMT. This rate decision was delayed due to the elections. There are speculations that Mervyn King can step up his measures, now that the elections are behind us. Inflation is rising. While the chance of raising the Official Bank Rate is very small, a different rate statement regarding future policy could boost the Pound, although this King wants a weak Pound.
2. Australian Annual Budget Release: Published on Tuesday at 9:30 GMT. The Australian Treasury will present the budget to the parliament and will lay out the economic prospects for the next year. This event is likely to rock the Aussie, as well as the kiwi.
3. British employment figures: Published on Wednesday at 8:30 GMT. Last month’s Claimant Count Change, the earliest and most important employment figure, continued the positive trend and showed a drop of over 32,000 unemployed people. On the other hand, the unemployment rate jumped to 7.8%. A setback can be seen now, and this might hurt the Pound.
4. German GDP: Published on Wednesday at 6:00 GMT. Europe’s biggest economy badly disappointed markets in Q4 – the economy stalled. Germany was considered the locomotive of the Euro-zone, carrying the weak economies on its back. Germany must return to growth in Q1’s preliminary release for the Euro to rise.
5. European Flash GDP: Published on Wednesday at 9:00 GMT. Although being released after the German and French figures, this publication also rocks the Euro. The economies in the Euro zone stalled in Q4 of 2010 – the initial report of 0.4% growth was later revised to no growth at all. There’s fear that Q1 will see a return to contraction – this will definitely hurt the Euro.
6. British BOE Inflation Report: Published on Wednesday at 9:30 GMT. Two days after the rate decision, Mervyn King has another opportunity to impact currency trading. This report doesn’t cover only inflation – it also contains updated economic forecasts and could hint about future rate policy. King will hold a press conference to accompany the release.
7. American and Canadian Trade Balance: Published on Wednesday at 12:30 GMT. This double-feature release in both countries always shakes USD/CAD. Canada enjoys a surplus in its balance while the US deficit is growing. A continuation of this trend could help the loonie.
8. Australian employment data: Published on Thursday at 1:30 GMT. After another rate hike, the sixth since the crisis, employment figures will probably justify this. Australia gained almost 20,000 jobs last month, and the unemployment rate remained at 5.3%. Both figures are expected to improve.
9. American Unemployment Claims: Published on Thursday at 12:30 GMT. The first weekly jobless claims release after the Non-Farm Payrolls will probably show a continuation of the trend – slightly less claims.
10. American Retail Sales: Published on Friday at 12:30 GMT. This important consumer related figure always rocks the markets. Last month saw a strong rise of 1.6% and also Core retail sales exceeded expectations with a rise of 0.6%. Rises this time will probably be weaker.
11. American Consumer Sentiment: Published on Friday 13:55 GMT. The university of Michigan’s consumer sentiment survey fell short of expectations last time – it fell from 73.6 to 69.5, the lowest in 5 months. This is a highly regarded survey, and comes at a sensitive time – just before the market closes.

That’s it for the major events this week.

Further reading:

• For the Euro, read the EUR USD Forecast.
• For the British Pound, look into the GBP/USD forecast.
• For the Australian dollar, read the AUD/USD forecast.
• For USD/CAD, check out the Canadian dollar forecast.

Want to see what other traders are doing in real accounts? Check out Currensee. It’s free.

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

Apart from the British elections, the British Pound also suffered from the European troubles. They began with the rumor that Spain would seek aid and turned into an avalanche. Now, the British events will take over:

1. Rate decision: Published on Monday at 11:00 GMT. This decision was delayed due to the elections and provides a strong start to the week. There are talks that Mervyn King will step up his measures, now that the elections are behind us, as the nflation is rising. While the chance of raising the Official Bank Rate is very small, a different rate statement regarding future policy could boost the Pound, although this King wants a weak Pound
2. BRC Retail Sales Monitor: Published on Monday at 23:00 GMT (midnight UK). This “mini retail sales” release, provided by the British Retail Consortium, gives a good picture towards the official figure that will be published later on. In the past two months, the volume of sales grew nicely, including a 4.4% leap last month. A smaller rise is predicted this time.
3. Manufacturing Production: Published on Tuesday at 8:30 GMT. The British industry enjoyed a rise of 1.3% in its manufacturing production last month, double the expectations. Manufacturing is 80% of all the industrial production and overshadows it. Note that this figure is volatile, and the impact is quite strong. A rise of 0.3% is expected now.
4. NIESR GDP Estimate: Published on Tuesday at 14:00 GMT. TheNational Institute of Economic and Social Research usually provides a good and up to date estimate of the economy’s performance. Last time, it was inline with economists expectations for a 0.4% rise in Q4, but the actual growth was weaker. The figure released now relates to the three months ending in April.
5. Employment data: Published on Wednesday at 8:30 GMT. Claimant Count Change represents the change in the number of people claiming unemployment related benefits. In the past two months, this number dropped significantly – over 32,000 people every month – this is excellent. A smaller drop is predicted this time. The unemployment rate jumped to 8% and it’s expected to improve this time. Also note the Average Earnings Index figure that rose by 2.3% last month – quite strong. A drop of 20,000 unemployed people is expected now.
6. BOE Inflation Report: Begins on Wednesday at 9:30 GMT. Two days after the rate decision, Mervyn King has another opportunity to impact currency trading. This report doesn’t cover only inflation – it also contains updated economic forecasts and could hint about future rate policy. King will hold a press conference to accompany the release.
7. Trade Balance: Published on Thursday at 8:30 GMT. The British trade deficit squeezed last month to 6.2 billion, better than expected. This helped the Pound at that time, and will probably help it this time as well, if the deficit is below 6 billion, but expectations stand on 6.5 billion.
8. CB Leading Index: Published on Friday at 9:00 GMT. This index is composed of 7 economic indicators – most of them already released. Nevertheless, this figure from the Conference Board tends to move the Pound. In the past few months, this index made steady rises. A small rise is predicted this time.

GBP/USD Technical Analysis

The Pound began the week with some range trading between 1.5120 and 1.5350. After conceding the 1.5120 line, GBP/USD dropped quickly below the previous 2010 low of 1.4780 and bottomed out at 1.4477 before closing at 1.4798.

This exciting week forced adding lower support lines on top of last week’s outlook. After closing above 1.4780, the Pound’s range is between 1.4780 (a strong support line) and 1.4975 (a minor resistance line).

Looking up, the serious line above is 1.5120. This worked as a strong support line and now works as resistance. Higher, 1.5350 is less strong than it used to be. The line above is 1.5520, but that’s far now.

Below, 1.4400 is a line we spoke about before, and was tested with the collapse in the past week. This serves as a strong resistance line. Under this line, 1.4130, which was a low point in March 2009 is another line of support.

Even lower, 1.3850, 1.3670 and 1.35 are below, but these lines are too far. At least now…

I am bearish on GBP/USD.

The hung parliament and the European troubles are stronger than the improving British economy, especially the employment data which will be updated the week. The Pound will probably continue suffering until these issues are resolved.

Further reading:

• For a broad view of all the week’s major event in all currencies, read the forex weekly outlook.
• For the Euro, read the EUR USD Forecast.
• For the Australian dollar, read the AUD/USD forecast.
• For USD/CAD, check out the Canadian dollar forecast.

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The Euro received good figures and managed to stabilize despite Greek troubles. No data is due today from Europe, but Greek news can always appear.
Australia’s MI Leading Index is expected to edge up once again, similar to last month’s 0.2% rise. At the time of writing, AUD/USD is bound by the 0.9327 resistance line.

For more on the Aussie, read the AUD/USD forecast.

In Britain,Claimant Count Change, which represents the number of unemployed people, is predicted to drop by 5,700, less than last month’s impressing drop of 32,300. This is a fresh figure – from March.

The unemployment rate for February, is the last report before the British elections. It’s predicted to remain at 7.8% for a fourth month in a row. Another related figure is the Average Earnings Index which will probably rise by 2.5%, stronger than last month’s 0.9% rise.

At the same time, 8:30 GMT, the British MPC Meeting Minutes will be released. This time, at the last release before the elections, no surprise is expected from the protocols.

For more on the Pound, read the GBP/USD forecast.

The Canadian dollar, which got a boost from the rate decision, will receive the Wholesale Sales figure today. After a rise of 3% last month, it’s predicted to rise by 1%.

For more on USD/CAD, read the Canadian dollar forecast.

Ben Bernanke will make another public appearance. He’ll speak at the event that will show the new $100 bill. Also in the US – Crude Oil Inventories are expected to rise by 0.1 million barrels.

Japan closes the day with its Trade Balance. A rise from 0.47 trillion to 0.66 trillion yen is expected in the deficit.

That’s it for today. Happy forex trading!

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