GBP/USD reversed directions last week and showed slight gains. The upcoming week has three releases. Here is an outlook for the highlights and an updated technical analysis for GBP/USD.
UK Net Lending to Individuals jumped to GBP 4.9 billion in February, up from GBP 2.8 billion. This was well above the estimate of GBP 3.6 billion and the highest level in 12 months. GDP for Q4 of 2020 was revised to 1.3%, up from the initial reading of 1.0%. Manufacturing PMI rose to 58.9 in March, its best showing since February 2011.
In the US, Conference Board Consumer Confidence soared to 109.7 in March, up from a revised reading of 90.4. It was the sharpest one-month gain in almost 18 years.
US Pending Home Sales posted a second straight decline in March. The decline of 10.6% was much sharper than the estimate of -3.1%. The week wrapped up with excellent nonfarm payroll numbers, which came in at 916 thousand. This was up from 379 thousand and crushed the estimate of 652 thousand.
- Services PMI: Wednesday, 8:30. The Services PMI showed growth in March for the first time in 5 months, accelerating from 49.5 to 56.8. A reading above 50 indicates growth. The final reading is expected to confirm the initial release.
- RICS House Price Balance: Wednesday, 23:01. Housing prices have been steady, and the indicator is projected to show that 55% of surveyors showed an increase in prices. In the previous release, 52% indicated an increase in prices.
- Construction PMI: Thursday, 8:30. The PMI improved to 53.3 in March, up from 49.2 beforehand. The final reading should confirm the initial release.
Technical lines from top to bottom:
We start with resistance at 1.4166.
1.4083 is next.
1.3974 was under pressure in mid-March, when GDP started an extended slide.
1.3891 is protecting the 1.39 level.
1.3699 (mentioned last week) is the first line of support.
1.3582 is the final support level for now.
I remain neutral on GBP/USD
In the UK the vaccine rollout has been successful and allowed the government to reduce health restrictions. In the US, the economy continues to show signs of improvement and the Biden infrastructure program will boost economic activity.
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