- CB Leading Index: Monday, 14:30. The index is based on 7 economic indicators. In December the index showed a small decline of 0.5%. Will we see an improvement in the January release?
- BoE Rate Decision: Thursday, 12:00. The BoE is widely expected to maintain the Official Cash Rate at 0.10% and asset purchases at GBP 895 billion. With the UK going through its worst economic crisis in three centuries, investors will be looking for signals from the bank as to whether it plans to add stimulus in order to boost the economy.
- GfK Consumer Confidence: Friday, 00:01. The British consumer remains pessimistic about economic conditions, with the index showing readings well below zero. Still, the index improved to -23 in February, its best reading in 11 months. The forecast for March stands at -20.
- Public Sector Net Borrowing: Friday, 7:00. The deficit was sharply lower in January, falling from GBP 33.4 billion to GBP 8.0 billion. However, the deficit is expected to climb to GBP 20.0 billion in February.
Technical lines from top to bottom:
We start with resistance at 1.4210.
1.4113 is next.
1.3972 was tested last week as the pound pushed above the 1.40 line before retreating.
1.3875 is the first level of support.
1.3734 has held since the first week in February.
1.3636 (mentioned last week) is the final support level for now.
.
I am neutral on GBP/USD
The pound has been making some noise and briefly crossed above the 1.40 level last week. At the same time, the massive Biden stimulus package should give the US economy a lift, which could boost the US dollar. The upcoming BoE policy meeting could have a significant impact on the pound’s direction this week.
Further reading:
- EUR/USD forecast – for everything related to the euro
- USD/JPY forecast – projections for dollar/yen
- AUD/USD forecast – predictions for the Aussie dollar
- USD/CAD forecast – Canadian dollar analysis
- Forex weekly forecast – Outlook for the major events of the week
Safe trading!