The British Pound stuck to its range for another week, failing to breach the magical 1.6660 line. This week’s key British events: Nationwide HPI, Current Account, Manufacturing PMI, Services PMI and American Non-Farm Payrolls could well shake the Pound. Here’s an outlook for this week’s 5 key events in the British Pound + a technical analysis for GBP/USD.
- Nationwide HPI: It’s published on Tuesday at 6:00 GMT, after being delayed from last week. Although not the first house price index, this is an accurate one. The British real estate sector has skyrocketed during the good years, and plunged in this crisis, accelerating the recession. After rising by 1.2% last month, it’s expected to turn negative again, and fall by 0.4%.
- Current Account: Britain’s current account usually shows a deficit, and the first quarter of 2009 isn’t different. At least it’s expected to squeeze down, and this might help the Pound. The deficit is predicted to fall from 7.6 to 6.5 billion. It’s published on Tuesday at 8:30 GMT.
- Manufacturing PMI: Purchasing Manager’s Index shows future expectations for the manufacturing sector. A figure below 50 means contraction. The figure has been below 50 for over a year, but has advanced in the last three months. Also now, it’s predicted to rise from 45.4 to 46.3. This will surely shake the Pound. Published on Wednesday at 11:30 GMT.
- Non-Farm Payrolls: On the first week of the month, the king of forex cannot be avoided…This super-major American figure shakes the whole world. After a surprise last time, when “only” 345K jobs were lost, NFP is predicted to take one step backwords and show a fall of 375K jobs. Strong movements are expected also in the British Pound. It’s published this week on Thursday at 12:30 GMT.
- Services PMI: The complementary figure for Manufacturing PMI is in the services PMI. Here, the purchasing managers show a more positive attitude in the survey. Services PMI surprised last month by jumping above the 50 line, hitting 51.7. This good momentum is expected to continue, by staying at the same score. Published on Friday at 8:30 GMT.
GBP/USD Technical Analysis
The British Pound continued its range trading last week, and it certainly marked the borders: it fell as low as 1.62, and went as high as 1.66, alittle lower than the major resistance line of 1.6660. This can be seen in the graph below:
This range trading has been going on for three weeks. The Pound fails to cross the major resistance line of 1.6660 which was a peak at the end of October. Looking down, 1.62 isn’t that strong – it was formed in the last weeks, but seems serious.
Non-Farm Payrolls could temporarily move GBP/USD below or above this range during the release. Naturally, surprising British releases or another huge surprise in NFP could make the pair break this range for the long term.
After closing the week at 1.6517, the Pound is close to the high end of the range, but anything can happen…
Have a great week!
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