GBP/USD Forecast Nov. 7-11

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GBP/USD had an excellent week, gaining about 300 points. The pair closed just above the 1.25 level. There are 7 events on the schedule this week. Here is an outlook on the major market-movers and an updated technical analysis for GBP/USD.

Updates:

GBP/USD graph with support and resistance lines on it. Click to enlarge:

gbp_usd_-daily-chart-nov7-11

  1. Halifax HPI: Monday, 8:30. This housing inflation index provides a snapshot of the level or activity in the housing sector. The indicator posted a small gain of 0.1% in September, edging above the forecast of 0.0%. The markets are expecting a gain of 0.3% in October.
  2. BRC Retail Sales Monitor: Tuesday, 00:01. This indicator measures retail sales data in BRC shops. The index gained 0.4% in September, bouncing back from a 0.9% decline a month earlier.
  3. Manufacturing Production: Tuesday, 9:30. This is the key event of the week and should be treated as a market-mover. The indicator posted a gain of 0.2% in August, short of the forecast of 0.4%. The markets are expecting better news in September, with an estimate of 0.5%.
  4. NIESR GDP Estimate: Tuesday, 15:00. This monthly indicator helps analysts track the official GDP report, which is released every quarter. The indicator gained 0.4% in September, marking a 3-month high.
  5. Goods Trade Balance: Wednesday, 9:30. The UK deficit widened to GBP 12.1 billion in August, which was higher than expected. The deficit is expected to narrow to GBP 11.3 billion in September.
  6. RICS House Price Balance: Thursday, 00:01. The indicator continues to improve, pointing to a strengthening housing market. In September, the indicator rose to 17% and the upswing is expected to continue in October, with an estimate of 18%.
  7. Construction Output: Friday, 9:30.  This construction indicator has failed to post a gain since April. This streak is expected to end in the September release, with an estimate of 0.2%.

* All times are GMT

GBP/USD Technical Analysis

GBP/USD opened the week at 1.2205 and quickly touched a low of 1.2143, as support held firm at 1.2130 (discussed last week). The pair then reversed directions and climbed sharply, touching a high of 1.2557 GBP/USD closed the week at 1.2513.

Live chart of GBP/USD:

Technical lines from top to bottom

With the pair posting sharp gains last week, we begin at higher levels:

1.2915 was a cushion in September but switched to a resistance line after sharp losses by GBP/USD.

1.2778 is next.

1.2620 was a cushion back in 1985.

1.2447 is next.

1.2272 marked the high point in October.

1.2130 is the final support level for now.

I am neutral on GBP/USD.

 
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About Author

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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