GBP/USD reversed directions last week, as the pair declined 1.3 percent. The upcoming week has four events, including GDP for the second quarter. Here is an outlook for the highlights and an updated technical analysis for GBP/USD. Bank of England Governor Bailey was forced to do some damage control last week, as he insisted that the BoE was not considering adopting negative interest rates. His denial came after the BoE policy statement stated that MPC members had been briefed on the possibility of negative rates. The pound briefly lost ground after that announcement, and Bailey was forced to beat a hasty retreat. Manufacturing and services PMIs remained in expansion territory, with readings above the 50-level. However, the August numbers showed a slowdown. The Manufacturing PMI dropped from 55.3 to 54.3, while the Services PMI slowed to 55.1, down from 60.1 beforehand. The UK’s budget deficit ballooned to GBP 35.2 billion in August, up from GBP 25.9 billion. Still, this was smaller than the forecast of GBP 40.6 billion. In the US, Federal Reserve Chair Powell had a busy week testifying on Capitol Hill. Powell reiterated that the Fed was using all available tools to support the budding economic recovery. He also called on Congress to provide additional fiscal stimulus. The US Flash Manufacturing PMI for September came in at 53.5, almost unchanged from 53.4 a month earlier. Importantly, the reading beat the estimate of 52.5 points. The index has been in expansion territory for four straight months, with readings above the 50-level, which separates expansion from contraction. On the services front, Flash Services PMI came in at 54.6, just shy of the previous release of 54.8 points. The respectable reading points to a solid rise in business activity, another sign that the economic recovery is strengthening. GBP/USD daily graph with resistance and support lines on it. Click to enlarge: Net Lending to Individuals: Tuesday, 8:30. Credit levels rose to GBP 3.9 billion in July, up sharply from GBP1.8 billion. This points to stronger consumer spending and confidence. The upswing is expected to continue, with an estimate of GBP 5.2 billion. BRC Shop Price Index: Tuesday, 23:01. This indication gauge continues to lose ground, indicative of weak inflation levels. The indicator declined by 1.6% in August and the September forecast stands at -1.4 percent. Final GDP: Wednesday, 6:00. The second quarter was a disaster, as Covid-19 shut down much of the economy. The final GDP reading is projected to confirm the initial reading of -20.4%. As this reading has been priced in, the release is unlikely to have much impact on the pound. Manufacturing PMI: Thursday, 8:30. The index remains above the 50-level, which separates contraction from expansion. The initial reading for August came in at 54.3 and the upcoming release is expected to confirm this figure. Technical lines from top to bottom: There is resistance at 1.3113 (mentioned last week). 1.3006 is protecting the symbolic 1.30 level. 1.2835 is next. 1.2689 has switched to a support role after sharp losses by GBP/USD last week. 1.2590 was a swing low in September 2017. Lower, 1.25 is a round number and also worked as support in early 2017. 1.2420 is the final support level for now. I remain bearish on GBP/USD Tensions over Brexit are again bubbling over as the final deadline is only two months away. With Covid-19 making a resurgence in the UK, the pound could remain under pressure. Follow us on Sticher or iTunes 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! Kenny Fisher Kenny Fisher 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. Kenny's Google Profile View All Post By Kenny Fisher GBP USD ForecastMajorsWeekly Forex Forecasts share Read Next Ripple Technical Analysis: XRP looks south, 100-DMA guards the immediate downside FX Street 3 years GBP/USD reversed directions last week, as the pair declined 1.3 percent. The upcoming week has four events, including GDP for the second quarter. Here is an outlook for the highlights and an updated technical analysis for GBP/USD. Bank of England Governor Bailey was forced to do some damage control last week, as he insisted that the BoE was not considering adopting negative interest rates. His denial came after the BoE policy statement stated that MPC members had been briefed on the possibility of negative rates. 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