GBP/USD Outlook – March 8-12
Mervyn King sure got a weaker Pound this week – it collapsed across the board. The upcoming week consists of 8 events that will move the Pound. Here’s an outlook for these events and updated technical analysis for GBP/USD in its lower ground.
GBP/USD graph with support and resistance lines on it. Click to enlarge:
The rate decision that we saw this week wasn’t different than previous ones, but the chance of renewing the Quantitative Easing program (hurting the Pound) still exists. Let’s start:
- Kate Barker talks: Starts speaking on Monday at 13:00 GMT. Barker is about to finish her job as a voting member of the MPC in May. This might make her words, in a speech in London, more loose. The last rate decision didn’t contain any big surprises, but she might indicate something about the future.
- BRC Retail Sales Monitor: Published on Tuesday at midnight GMT. The British Retail Consortium releases this unofficial retail sales release before the government, but it isn’t always accurate. After four months of expansion, sales volume fell by 0.7% in the previous month. A small rise is expected this time.
- RICS House Price Balance: Published on Tuesday at midnight GMT and overshadowed by the BRC release. The balance between areas reporting house price rises and ones showing a drop has been OK. After this indicator reached a peak at 45%, it fell back to 30%. It’s now expected to rise again – from 32% to 36%.
- Trade Balance: Published on Tuesday at 9:30 GMT. The British deficit rose to 7.3 billion last month, and it’s now expected to drop back to to 6.9. A deficit in trade balance is normal for Britain.
- Manufacturing Production: Published on Wednesday at 9:30 GMT. This event will probably have the strongest immediate impact on the Pound. Production surprised with a nice rise of 0.9% last month, and is now predicted to get back to slower growth – 0.3%. Note that the Industrial Production figure contains manufacturing (80%) and other sectors, but the manufacturing number is eyed.
- NIESR GDP Estimate: Published on Wednesday at 15:00 GMT. The NIESR independent institute is known for its accuracy. They release a monthly estimate that relates to the three months that just ended. Their last projection showed growth at a scale of 0.4%. A similar number is expected this time.
- Consumer Inflation Expectations: Published on Thursday at 9:30 GMT. The BOE releases a quarterly figure that shows what consumers expect. Prices have risen in the UK, but Mervyn King has a tendency to dismiss it. Well, now we’ll see what consumers think. In the previous three quarters, expectations were identical – 2.4%.
- Spencer Dale talks: Starts speaking on Friday at 10:00 GMT. As chief economist of the BOE, Dale’s words have an impact on the Pound. He’ll talk in front of Cambridge students close to the close of the markets and could shake the Pound.
GBP/USD Technical Analysis
The Pound began the week with a big collapse: it lost 1.50 and dropped quickly to 1.4780, were it bounced back. The close at 1.5133 isn’t too bad considering the bad start, but it still reflects a third week of lower closes.
GBP/USD is currently bound by two minor lines: 1.50 from below, being a round number, and this week’s peak of 1.5167 – a line that didn’t appear in last week’s outlook.
Looking up, 1.5350 is a very strong resistance line. The break of this line (when it served as support) sent GBP/USD tumbling down. Higher, 1.5833 is the next important line. GBP/USD wasn’t above it for many weeks now.
Looking down, 1.4780 provides strong support. It worked as a support and resistance line in the spring of 2009, and held the Pound from falling further just now.
Even lower, 1.44 is the next significant line of support, working as such during May 2009. A break of 1.4780 is needed for further downside towards this line.
I remain bearish on GBP/USD.
Worries about a political stalemate, debt and unemployment continue to weigh on the Pound. The loss of important technical levels reflects the situation.
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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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Forex Daily Outlook – February 10th 2010
We finally have a busy day today, with many important indicators, especially in Britain. GBP/USD and the Pound crosses will rock today. Let’s see what’s up for today:
The upcoming resolution of the Greek crisis sure is helping the Euro by breaking technical levels. EUR/USD is above 1.3750.
GBP/USD Outlook – February 8-12
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 [...]
Forex Daily Outlook – January 13th 2010
The dollar is certainly fighting back after dropping at the beginning of the week. Today’s most interesting figures come from Britain, which sees more range trading. Let’s review the events for today:
Forex Weekly Outlook – January 11-15
After a turbulent start to the year, the second week also provides may important events: retail sales and inflation figures in the US, key employment figures in Australia and a rate decision in Europe are among the highlights this week. Let’s see what’s awaiting us in the wake of the NFP.
American Non-Farm Payrolls, the most important [...]
GBP/USD Outlook – January 11-15
Looking for the latest outlook, for the current week? Check out the section: British Pound Forecast
The Pound didn’t enjoy the American NFP, and finished lower once again. The upcoming week provides 6 events that will impact the Pound, with the unofficial Q4 GDP being the highlight. Here’s an outlook for the upcoming week in Britain, [...]
Forex Daily Outlook – December 8th 2009
No significant American indicators are predicted today, but elsewhere, the calendar is busy: a rate decision in Canada, Final GDP in Japan, and the unofficial but accurate GDP estimate in Britain. Let’s see what’s up for today:
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