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For a second straight week, the  British pound  showed movement but was unchanged over the week. The pair closed at 1.6084. There are 7 events on the schedule.  Here is an outlook on the major events moving the  pound and an updated technical analysis for GBP/USD.

British Retail Sales and manufacturing data disappointed, but GDP matched the forecast. In the US, data was generally positive, with jobless claims and inflation holding on. However, New Homes Sales slumped in September.

 

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GBP/USD graph with support and resistance lines on it.

GBPUSDForecast Oct27-31

 

  1. CBI Realized Sales:  Sunday, 23:00. The indicator has looked sharp in the past few months, with the previous reading coming in at 31 points. The forecast for the upcoming release stands at 29 points.
  2. BoE Deputy Governor Nemat Shafik Speaks: Monday, 18:30. Shafik will deliver remarks  at the London School of Economics. A speech which is more hawkish than  expected is  bullish for the pound.
  3. BoE Deputy Governor Jon Cunliffe Speaks:  Tuesday, 17:30.  Cunliffe makes his first public appearance of the week at the Cambridge Economics Curriculum Reform.  Any unexpected remarks could affect the movement of GBP/USD.
  4. Net Lending to Individuals:  Wednesday, 9:30.  An increase in credit provided to  individuals usually translates into  stronger consumer spending, which is  crucial for economic growth. Last month, the indicator came in at 3.2 billion pounds, just above the  estimate of 3.1 billion. The markets are expecting a downturn in the September release, with an estimate  of 2.8 billion.
  5. BoE  Chief Economist Andy Haldane  Speaks: Wednesday, 17:.30. As chief economist, Haldane’s remarks are carefully monitored by the markets. Analysts will be looking for clues as to the BoE’s future monetary stance.
  6. Nationwide HPI: Thursday, 7:00. This indicator provides a snapshot of activity in the UK housing sector. The index declined by 0.2% last month, well short of the estimate of +0.6%. The forecast for the upcoming release stands at 0.4%.
  7. BoE Deputy Governor Jon Cunliffe Speaks: Thursday, 7:45. Cunliffe will speak at an event in Bradford on Avon. A speech which is more hawkish than  expected is  bullish for the pound.

* All times are GMT

GBP/USD Technical Analysis

GBP/USD  opened the week at 1.6090 and showed strength, climbing to a high of 1.6184. The pair then reversed directions, breaking below support at 1.6006 (discussed  last week)  and touching a low of 1.5994. GBP rebounded and closed the week  at 1.6084.

Live chart of GBP/USD:

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Technical  lines from top to bottom

We  start with resistance at 1.6465, which was the bottom in March. Further below, the round number of 1.64 is providing resistance.

1.6310, the next resistance line, was a cushion during  January.

1.6250 continues to be a strong resistance line.

1.6131  was breached but recovered and  starts the week as immediate resistance.

The first line of support is at  1.6006, just above the psychologically important 1.60 level. The pair briefly breached this line, which continues to see action.

1.5909 is  the next support level. It has held firm since November 2013.

Next is 1.5746, which was an important support line in January 2013.

The final support line for now is 1.5625.

I am  neutral on GBP/USD.

The US economy continues to roll, and a strong GDP release could bolster the US dollar. As well, the Fed is likely to wrap up QE this week. This significant step  should put the markets in a positive mood about the US dollar, as the focus shifts to the timing of a rate hike, which is widely expected in 2015.

 

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