After GBP/USD managed not to fall off the cliff, the upcoming week is very busy, with the rate decision being the highlight. Here’s an outlook for the 8 events that will rock the pound, and an updated technical analysis for GBP/USD. British contraction wasn’t as bad as expected in Q4, but not too good. Also manufacturing PMI was worrying. What sector will carry the economy in the UK? We’ll get an update from other sectors this week. Let’s start. GBP/USD daily chart with support and resistance lines marked. Click to enlarge: Halifax HPI: Publication time unknown at the moment. This is one of the most accurate reports on prices of homes in the UK, as it is based on the internal mortgage figures of HBOS. The Halifax HPI has been a see-saw lately. The last report was disappointing, showing a significant drop of 0.9%. A rise of 0.2% is expected now. A rise of 1% or more will boost the pound. Construction PMI: Monday, 8:30. The construction sector dipped under 50 points 3 months ago, meaning that the sector is contracting. An impressing recovery followed, and the score reached 56.5 points last month, reflecting strong growth. But this time, the figure for March is likely to be weaker – 54.5 points. Services PMI: Tuesday, 8:30. The UK has a big services sector, making this purchasing managers’ index the most important one. Similar to the construction sector, also the score here dipped into the land of contraction, but the recovery was weaker. Last month was very disappointing – the score fell to 52.6 points, and triggered thoughts that the rate hike will be delayed. A similar number is expected now. BRC Shop Price Index: Tuesday, 23:00. Normally this is a second tier figure, but as inflation is high, even this figure is important. According to the British Retail Consortium, prices at shops are now rising at a rate of 2.7%, significantly higher than 3 months ago, only 2.1%. Another rise is expected now. Manufacturing Production: Wednesday, 8:30. In line with the manufacturing PMIs released in recent months, also this official figure shows that the industry is growing nicely. A rise of 1% was seen last time. Expectations are for a rise of 0.6% this time, but it could be higher, given the solid Manufacturing PMI. NIESR GDP Estimate: Wednesday, 14:00. This think tank is usually accurate in assessing the GDP, and they do it on a monthly basis. This specific release is of high interest, as it reflects the 3 months that ended in March – the full first quarter of 2011. The previous figure, for the three months that ended in February, showed a rise of 0.2%. It will probably be similar now. Rate decision: Thursday, 11:00. The consensus is that the rate hike will wait for May. The recent meeting minutes have shown that there are still not enough members in favor of a rate hike now. There are currently only 3 out of 9. Inflation has surprised again with a rise to 4.4%, but this will probably not be enough to move the MPC to act. So yet again, the Official Bank Rate is expected to remain at 0.50%. No changes are expected in the bond buying scheme and a statement from the split MPC isn’t likely either. PPI: Friday, 8:30. Producer prices are also rising, in line with consumers prices. After one month relative ease, PPI Input, the principal figure, is expected to show a rise of 2.2%, double the previous month. A rise above 3% will boost the pound. PPI Output is expected to rise by 0.7%. * All times are GMT. GBP/USD Technical Analysis Cable began the week with a drop below the 1.60 line (discussed last week) and found support at around 1.5940. It then made a comeback, managed to settle above 1.60 but failed to conquer the 1.6110 line, and it closed just below it, at 1.61108. 1.6110, that just capped the pair on its way up has a stronger role now than in previous weeks, and will serve as a pivotal point at the beginning of the week.. It’s followed by a major resistance area at 1.6280 – 1.63 . This line prevented the pair from rising for a very long time. It was only briefly breached two weeks ago. Further above, 1.64, which was the peak of the temporary break, is the next line of resistance. It’s closely followed by a rather old swing high of 1.6450 – a level that wasn’t seen in a long time. Higher, a strong resistance line appears at 1.67 – this was a multiple top back in 2009. Even higher above, far out in the distance, 1.7040, the peak of 2009 is the last stronghold. Looking down, immediate and significant support is found at the round number of 1.60, although it’s slightly weaker than in previous weeks. This was the peak in August and a clear line since then. Just below, the role of 1.5940 is stronger now, after it prevented a bigger fall. This is the key line on the downside now. Lower, the 1.5820 line, which served in both directions before the pair moved higher is a minor support line. Not too far down, 1.5750 which is already a stronger line provides somewhat stronger support. An even stronger line is 1.5650. This was the upper border of wide range that GBP/USD traded before shifting to a higher range. Further below, 1.5480 is a minor support line after being a swing low back in November. The last and strong line for now is 1.5350 – which was a strong floor for the pair. There are plenty more lines lower, but they weren’t reached in a long time I remain bearish on GBP/USD. Contrary to the ECB, the BoE won’t hike the rates this week. Together with falling manufacturing, the only sector that pushed the economy forward and an improving US economy, GBP/USD leans to the downside. Further reading: For a broad view of all the week’s major events worldwide, read the USD outlook. For EUR/USD, check out the Euro/Dollar forecast. For the Japanese yen, read the USD/JPY forecast. For the Australian dollar (Aussie), check out the AUD to USD forecast. For the New Zealand dollar (kiwi), read the NZD forecast. For USD/CAD (loonie), check out the Canadian dollar. Yohay Elam Yohay Elam Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay's Google Profile View All Post By Yohay Elam GBP USD ForecastMajors share Read Next USD/CHF Outlook April 4-8 Yohay Elam 11 years After GBP/USD managed not to fall off the cliff, the upcoming week is very busy, with the rate decision being the highlight. Here's an outlook for the 8 events that will rock the pound, and an updated technical analysis for GBP/USD. British contraction wasn't as bad as expected in Q4, but not too good. Also manufacturing PMI was worrying. What sector will carry the economy in the UK? We'll get an update from other sectors this week. Let's start. GBP/USD daily chart with support and resistance lines marked. Click to enlarge: Halifax HPI: Publication time unknown at the moment. 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