After a very volatile week that included a rate decision, another busy week awaits the British pound, with more impact from Mervyn King and of course, the downgrade that the US received from S&P. Here is an outlook for the upcoming events, and an updated technical analysis for GBP/USD. The pound got mixed indicators in the past week. The manufacturing sector is suffering badly, while construction is stable and the services sector is enjoying faster growth. This is part of the story of the pound’s choppiness, that will likely continue now. GBP/USD daily chart with support and resistance lines on it. Click to enlarge: Nationwide Consumer Confidence: Publication time unknown at the moment. Contrary to some other indicators, this survey of 1000 consumers has shown improved confidence in the past few months. A small drop is predicted from last month’s 51 points score. BRC Retail Sales Monitor: Monday, 23:00. This indicator, released early in the week, is an early indicator for the official retail sales figure. In the past two months, stores represented by BRC reported declines, that corrected the big leap in April – the month of the Royal Wedding. A small rise is likely now. RICS House Price Balance: Monday, 23:00. According to RICS, more regions are showing price drops than regions showing gains in the past year. The score of -27% reported last month will probably be followed by a similar one. Manufacturing Production: Tuesday, 8:30. Britain’s manufacturing sector is in trouble, according to the latest purchasing managers’ survey for July. Also this complementary figure is likely to show a drop in June, especially after the big gain of 1.8% reported last time for May. The wider,yet less important industrial production number is expected to print a small drop as well. Trade Balance: Tuesday, 8:30. After a few months of stabilization around 7.5 billion, the UK’s trade deficit widened to 8.5 billion in May, weighing on the pound. A squeeze in this deficit is likely now, for the month of June. NIESR GDP Estimate: Tuesday, 14:00. The highly regarded think-tank is usually very accurate in its assessments of the economy. For Q2, it has shown weak 0.1% growth, compared with the preliminary official number of 0.2%. The current release is for the three months ending in July, and it is expected to show a slightly better number. BOE Inflation Report: Wednesday, 9:30. The Bank of England’s report isn’t only about inflation, but also consists of updated forecasts for employment and growth. This quarterly report is accompanied by a press conference with BOE governor Mervyn King. King tends to be quite pessimistic, lowering expectations and pounding the pound, although his the last major report was quite positive for the pound. CB Leading Index: Thursday, 9:00. The last indicator this week is a composite one, based on 7 indicators. The Conference Board has shown faster acceleration in the economy in May, 0.6%. June is likely to be worse. * All times are GMT. GBP/USD Technical Analysis Pound/dollar was a roller coaster, trading in a very wide range. The peak was the 1.6470 line (discussed last week) and the bottom was just above the 1.62 line. Technical levels, from top to bottom: We start from a point that was the highest this year: 1.6750. This line also had a role in the past, and might be tackled on an upwards move. Minor resistance is found at 1.6623, which was support when the pair was trading higher. 1.6550 was a peak at the end of May and is a distant resistance line. 1.6470 is a tough line of resistance, that capped the pair three times in June and worked perfectly well for another week in a row. It will be tested on positive news. The veteran 1.6280 to 1.63 has a weaker, somewhat more pivotal role at the moment. It was a peak several times in recent months and worked better as support. 1.62 was a very distinctive line for another week in a row. It provided a solid bottom when the pair was falling. Further below, 1.6110 is another veteran line. It quickly turned into support before the next move higher. Below, the round number of 1.60 was the base of the leap. 1.5940, which was a previous swing low, returns to play a role now, but a minor one. 1.5910, which was a peak many months ago, worked perfectly as support after the pair climbed back up. It is an important line now. 1.5820 is only a minor line. It delayed the comeback. The fresh low of 1.5780 is the next support line, which will be tested on the next fall. I am bullish on GBP/USD. The pound has room for initial gains following the credit downgrade of the US by S&P. Britain has managed to distant itself from the raging debt crisis in Europe and seems like a “safe debt” country. After the initial rise at the The overall picture for Britain isn’t too good, and after the dust settles, the pound has room for falls. In any case, more choppy range trading is likely, in wide ranges. 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 to 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 Zealanddollar (kiwi), read the NZD forecast. For USD/CAD (loonie), check out the Canadian dollar For the Swiss Franc, see the USD/CHF forecast. 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/JPY Outlook – August 8-12 Anat Dror 12 years After a very volatile week that included a rate decision, another busy week awaits the British pound, with more impact from Mervyn King and of course, the downgrade that the US received from S&P. Here is an outlook for the upcoming events, and an updated technical analysis for GBP/USD. The pound got mixed indicators in the past week. The manufacturing sector is suffering badly, while construction is stable and the services sector is enjoying faster growth. This is part of the story of the pound's choppiness, that will likely continue now. 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