The British pound found a lower bottom this week, but managed to bounce from there. A very busy week consists of key economic figures as well as the rate decision. Will it break lower? Here’s an outlook for the British events, and an updated technical analysis for GBP/USD. In the inflation hearings, Mervyn King and his colleagues were generally pessimistic about the British economy. No rate is expected anytime soon. Another fall in the Construction PMI provides good reasoning. Let’s start: GBP/USD daily graph with support and resistance lines on it. Click to enlarge: Halifax HPI: Publication time unknown at the moment. This is one of the more trusted house price indices in Britain. The reason is that it is based on the internal mortgage data of the HBOS, one of the bigger banks. So, when Halifax HPI dropped by 1.4% two months ago, it was felt on the pound. A rise of only 0.1% followed. Another small rise is likely now. Construction PMI: Monday, 8:30. Continuing the series of purchasing managers’ indices that began on Friday, the construction sector didn’t disappoint last month, and even edged up to 54 points, indicating stronger growth. A slide back down is likely now. Services PMI:Tuesday, 8:30. The most important PMI is kept for last. The biggest sector disappointed in the past two months and dropped to 53.8, indicating slower growth. Another drop is likely now, but as long as the critical 50 point mark isn’t breached, the pair won’t plunge. BRC Shop Price Index: Tuesday, 23:00. The British Retail Consortium provides a snapshot of retail sales. According to BRC, the pace of growth of sales within its members ticked down to 2.3% last month. A similar number is expected now. Manufacturing Production: Thursday, 8:30. The manufacturing sector is definitely suffering. A plunge of 1.5% was reported last month. This was not only a strong fall, but the third straight disappointment. A correction, with a small rise, is likely now. The wider, though less important industrial production number is likely to rise as well. Rate decision: Thursday, 11:00. The recent meeting minutes have shown that nothing should be expected from the MPC until the next summer. Not only is the new MPC less hawkish (without Sentance), but it is even considering a new round of QE to help the sluggish economy recover. So also now, the Official Bank Rate is expected to remain unchanged. NIESR GDP Estimate: Thursday, 14:00. This independent think tank provides a fresh overview of the economy in the last three months. So this time, it will provide a look at the whole second quarter. A growth rate of less than 0.5% is expected. A figure close to zero will hurt the pound. PPI: Friday, 8:30. After a few months of strong surprises in producer prices, a big correction was seen last time, with PPI Input falling by 2%. A small correction is likely now, although falling commodity prices could send prices lower for a second month in a row. PPI Output is expected to stay almost unchanged. Trade Balance: Friday, 8:30. Britain’s trade deficit has stabilized lately. A figure between 7 to 8 billion pounds of deficits has become the norm. Any figure out of this range will rock the pound. * All times are GMT. GBP/USD Technical Analysis Pound/dollar had a bad start to the week, falling to 1.5910 twice. This is a new line on the chart. It then managed to recover, but was strongly capped by the veteran 1.6110 line, discussed last week. Technical levels, from top to bottom: 1.6530 capped recovery attempts a few weeks ago, and did it successfully, more than once. 1.6460 is a tough line of resistance, that capped the pair three times in recent weeks. It’s tough resistance that will cap strong recovery attempts. The veteran 1.6280 to 1.63 isn’t too far off, proved to be a very strong line. It was a peak several times in recent months and worked better as support. Minor resistance is found at 1.62, that managed to work in both directions two weeks ago. Further below, 1.6110 is another veteran line. IT has just proved its strength by capping a recovery attempt just now. Below, the round number of 1.60 provided some support and is a minor line. 1.5910, which was a peak many months ago, worked perfectly as support. It is an important line now. The next levels below are 1.5820 which was a trough before the current wide range trading and 1.5750. Stronger support is at 1.5650, with 1.5350 far in the distance. I remain bearish on GBP/USD. With the British MPC holding the rates low for a long time, the end of QE2 in the US makes the dollar a favored currency, especially after seeing some improvement in the US. Weak British figures for June are expected to continue after the first disappointing release of Manufacturing PMI. FX Tech Strategy sees GBP/USD reversing its gains, using his technical analysis tools. 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 GBP/USD (cable), look into the British Pound 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 For the Swiss Franc, see the USD/CHF forecast. 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 EUR/USD Outlook – July 4-8 Yohay Elam 11 years The British pound found a lower bottom this week, but managed to bounce from there. A very busy week consists of key economic figures as well as the rate decision. Will it break lower? Here's an outlook for the British events, and an updated technical analysis for GBP/USD. In the inflation hearings, Mervyn King and his colleagues were generally pessimistic about the British economy. No rate is expected anytime soon. Another fall in the Construction PMI provides good reasoning. Let's start: GBP/USD daily graph with support and resistance lines on it. 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