The pound got a beating but managed not to fall to a 5 month low. The upcoming week is very busy with key figures from many sectors. Here is an outlook for the British events, and an updated technical analysis for GBP/USD. One of the main reasons for the fall came from the meeting minutes. Despite high inflation, the MPC is unlikely to raise the rates, perhaps not not until the next summer. Even a second QE program in Britain is on the agenda. This is due to the weakness of the economy. Will we see a breakdown? Let’s start: GBP/USD daily chart with support and resistance lines on it. Click to enlarge: Final GDP: Tuesday, 8:30. The British economy rebounded in the first quarter of 2011, according to the first and second releases. The final publication is likely to confirm the 0.5% growth, which hardly erases the contraction in the fourth quarter. Any change will rock the pound. Current Account: Tuesday, 8:30. At the same time as the GDP, the current account for the first quarter is expected to show a smaller deficit in overall inflows and outflows – only 5 billion, less than 10.5 billion recorded in Q4. This might provide support for the pound. Mervyn King talks: Tuesday, 9:00. The head of the central bank, Sir King, is expected to appear in parliament with a few of his colleagues and discuss inflation, the economic situation and more. The hearings, that will last for hours, are likely to provide quite a few headlines. While inflation remains very high, a rate hike isn’t on the table, as the economy is hardly on its feet. Hints about QE2 in Britain might weaken the pound. Net Lending to Individuals: Wednesday, 8:30. Credit expansion has stabilized in recent months above 1 billion pounds. More expansion means more economic activity. The figure is expected to stand at 1.2 billion for a second month in a row. GfK Consumer Confidence: Wednesday, 23:00. This survey of 2000 consumers has seen worse days. Last month is surprised by rising to -21, better than around -30 beforehand. This is still in the negative zone meaning consumer pessimism. A small drop to -23 is expected now. Nationwide HPI: Thursday, 7:00. This closely watched house price index has been volatile in recent months. It is now expected to rise for a second month in a row, but at a very low rate, only 0.1%. A drop will hurt the pound. BOE Credit Conditions Survey: Thursday, 8:30. Last but not least, this quarterly report from the central bank comes at a critical time, as the credit crunch returns. The report is expected to be worse than in Q1. Manufacturing PMI: Friday, 8:30. Last but not least, the new month begins with a purchasing managers’ index. Last month, the manufacturing sector disappointed for a third month in a row. Growth has significantly slowed down. The score is now expected to rise from 52.1 to 52.4 points. Another drop towards the 50 point line (separating growth and contraction) will weigh heavily on the pound. * All times are GMT. GBP/USD Technical Analysis Cable had an OK start to the week, climbing but falling short of the 1.6280 – 1.63 range (discussed last week). The pair fell from there, all the way to the support line of 1.5940, which held up nicely, but it isn’t too far from there. Technical levels, from top to bottom: 1.6530 capped recovery attempts in recent weeks, more than once. 1.6460 is a tough line of resistance, that capped the pair three times just now. 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 just now. Further below, 1.6110 is another veteran line. It now works as tough resistance on any recovery attempt. Just below, 1.6050 proved to be a good line of support, after working as such twice during June. 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. Stronger support is at 1.5650, with 1.5350 far in the distance. I remain bearish on GBP/USD. Not only is the situation in Britain bad, but the prospects of a rate hike have been pushed back to the summer of 2012. Very far from now. Together with the end of QE2 in the US, there is room for a breakdown below the critical support line. Will the next challenge succeed? 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 EUR/USD Outlook – June 27 – July 1 Yohay Elam 11 years The pound got a beating but managed not to fall to a 5 month low. The upcoming week is very busy with key figures from many sectors. Here is an outlook for the British events, and an updated technical analysis for GBP/USD. One of the main reasons for the fall came from the meeting minutes. Despite high inflation, the MPC is unlikely to raise the rates, perhaps not not until the next summer. Even a second QE program in Britain is on the agenda. This is due to the weakness of the economy. Will we see a breakdown? 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