The pound had a very bad week, and lost a lot of ground. Will this continue? We have key inflation and employment figures now, among other events. Here’s an outlook for the upcoming events and an updated technical analysis for GBP/USD. An improved trade balance deficit helped the pound only marginally. With no move on the rates in the foreseeable future, the falls got their justification with very disappointing manufacturing data. The key to the rates is inflation. Let’s see what is expected: GBP/USD daily chart with support and resistance lines marked. Click to enlarge: Martin Weale talks: Monday, 6:00. This MPC member is one of the three that votes for a rate hike. In his speech in London, Weale is likely to talk about his updated view on inflation and on future monetary policy. RICS House Price Balance: Monday, 23:00. Since it reached a terrible figure of -49% at the end of 2010, this indicator of regions which see price rises and those that see falls has improved, but is still negative. It is expected to rise from -21% to -20% this time. CPI: Tuesday, 8:30. After one month of pause, British inflation leaped again, and reached a peak of 4.5% last month. Official expectations are for the same annual pace this time again. Given the fall in commodity prices seen in May, this could be lower. We have already seen that producer price fell more than expected. Together with the headline CPI, Core CPI is expected to ease from 3.7% to 3.6%. The Retail Price Index (RPI) is predicted to to rise from 5.2% to 5.4%. Nationwide Consumer Confidence: Tuesday, 23:00. This wide survey has managed to stabilize in recent months, after many months of falls. Despite this stabilization, another tick down is expected, from 43 to 41 points. Employment data: Wednesday, 8:30. A third month in a row of rises in jobless claims is expected now. Claimant Count Change is expected to show a rise of 7300 people in May, less than 12,400 last month. This is very worrying and could weigh heavily on the pound. The unemployment rate for the month of April is expected to remain unchanged at 7.7%. Mervyn King talks: Wednesday, 19:45. The governor of the BOE has been quite reluctant to move on the rates, and usually blames inflation on high oil prices. In his speech in London, King might lay out his view of the economy. Retail Sales: Thursday, 8:30. Last month’s rise in retail sales has been a nice surprise for the pound. This was partially attributed to the Royal Wedding. A drop of 0.4% is now expected in this important event. * All times are GMT. GBP/USD Technical Analysis At the beginning of the week, GBP/USD moved higher and was capped by 1.6460, a new line that didn’t appear last week. Towards the end of the week, cable lost ground quickly and couldn’t get back above the 1.6280 – 1.63 region. Technical levels, from top to bottom: The ultimate resistance line is the 2009 peak of 1.7042 which is important resistance in the distance. It was the highest level since the financial crisis. Minor resistance is found at 1.6843, which was a line of resistance in the past. 1.67 remains strong resistance, despite temporary breaches in recent weeks. These were false breaks. 1.66 is even stronger, being very distinct – separating between low and high ranges a few weeks ago, and having a role in the past as well. 1.6530 capped recovery attempts in recent weeks, and did so just now. The break above it was false and temporary. 1.6460 is a tough line of resistance, that capped the pair three times just now. It’s tough resistance. 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 support is found at 1.62, after cushioning a fall now. Further below, 1.6110 is another veteran line. It’s second test didn’t work (after a previous successful one), but it is still of importance. The round number of 1.60, which was a peak in August 2010 and resistance afterwards, is only minor support now. More significant support is at 1.5940, which was tested more than once. The next levels below are 1.5820 which was a trough before the current wide range trading and 1.5750 will be the final line for now. I remain bearish on GBP/USD. All the signs show that the British economy is slowing down. And contrary to the ECB, the BOE is more cautious on the rates, and no move is visible until November. There is room for more falls for the pound. FX Tech Strategy sees the pound weak against both the dollar and the euro. 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 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. 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 We Have A Volunteer For Greek Losses Yohay Elam 12 years The pound had a very bad week, and lost a lot of ground. Will this continue? We have key inflation and employment figures now, among other events. Here's an outlook for the upcoming events and an updated technical analysis for GBP/USD. An improved trade balance deficit helped the pound only marginally. With no move on the rates in the foreseeable future, the falls got their justification with very disappointing manufacturing data. The key to the rates is inflation. Let's see what is expected: GBP/USD daily chart with support and resistance lines marked. 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