GBP/USD broke above the 1.40 level last week but was unable to hold above this line and had to settle for slight gains over the week. The upcoming week has five releases. Here is an outlook for the highlights and an updated technical analysis for GBP/USD.
UK unemployment numbers were a mixed bag. Claimant Count fell by 10.1 thousand, down from 86.6 thousand and beating the forecast of 24.5 thousand. However, wage growth underperformed, falling from 4.8% to 4.5% and missing the estimate of 4.7%. The unemployment rate dipped down to 4.9%, down from 5.0%.
Inflation rose in March, as headline CPI climbed to 0.7%, up from 0.4%. Core CPI rose to 1.1%, up from 0.9%. Retail Sales for March jumped 5.4%, up from 2.1% and well above the estimate of 1.5%. The week ended on a bright note, as Manufacturing and Services PMIs outperformed and accelerated in March, with readings of 60.7 and 60.1, respectively.
In the US, unemployment claims dropped for a second straight week to 547 thousand, down from 576 thousand beforehand. Manufacturing PMI in March improved to 60.6, up from 59.0. A reading above the 50-neutral level points to growth.
GBP/USD daily chart with support and resistance lines on it. Click to enlarge:
CBI Realized Sales: Tuesday, 10:00. Sales volumes have been mired deep in negative territory, with the past two readings at -45. The indicator is expected to punch into positive territory in April, with an estimate of +9 points.
BRC Shop Price Index: Tuesday, 23:01. The British Retail Consortium continues to post declines and came in at -2.4% in March. We now await the April data.
Technical lines from top to bottom:
We start with resistance at 1.4070.
1.3956 is next.
1.3824 (mentioned last week) is the first support level.
1.3726 is next.
1.3612 is the final support level for now.
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I am bullish on GBP/USD
The US dollar continues to stumble, while the pound showed last week that the 1,40 level is within striking distance. The UK economy will strengthen as the reopening continues, which bodes well for the pound.
Kenny Fisher - Senior Writer
A native of Toronto, Canada, Kenneth worked for seven years in the marketing and trading departments at Bendix, a foreign exchange company in Toronto. Kenneth is also a lawyer, and has extensive experience as an editor and writer.
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