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GBP/USD  showed downward movement  but closed  the week almost unchanged.  The pair  ended the week just above the 1.67 line. This week’s highlights are  Manufacturing Production and the Inflation Report Hearings. Here is an outlook for the main events moving the pound, and an updated technical analysis for GBP/USD.

British PMIs releases met expectations, and the BOE  maintained interest rates, as was expected. In the US, the markets were pleased with strong employment data from Unemployment Claims and Nonfarm Payrolls.

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GBP/USD graph with support and resistance lines on it. Click to enlarge:   GBPUSD Forecast Mar. 10-14

  1. BOE Deputy Governor Charles Bean Speaks: Monday, 14:15. Bean will speak at an event in Darlington. Remarks that are more bullish than expected are bullish for the British pound.
  2. BRC Retail Sales Monitor: Tuesday,  00:01. This indicator measures retail sales in stores belonging to the BRC chain. Retail Sales is the primary gauge of consumer spending and this indicator will be closely monitored by the markets. The January reading was excellent, with a surge of 3.9%.
  3. Manufacturing Production:  Tuesday, 9:30.  Manufacturing Production is a key event which can move GDP/USD. The indicator posted a modest gain of 0.3% last month, and no change is expected in the upcoming release.
  4. Inflation Report Hearings: Tuesday, 10:00. This event is one of the highlights of the week. Parliament’s Treasury Committee conducts the hearings, and BOE Governor Mark Carney and other policymakers  will testify.  With inflation  running close to the BOE’s target  of 2.0%, the markets will be  following closely.
  5. NIESR GDP Estimate: Tuesday, 15:00. This monthly indicator helps analysts  track  GDP, which is released on a quarterly basis. The indicator has looked very steady, with the previous release coming in at 0.8%. No major movement is expected in the upcoming release.
  6. Trade Balance: Wednesday, 9:30. Trade Balance surprised last month with a smaller deficit than expected. The deficit narrowed to -7.7 billion pounds, bettering the estimate of -9.3 billion. The estimate for the February release stands at -8.7 billion.
  7. BOE Quarterly Bulletin: Thursday, 00:01. This report contains market commentary and analysis.  It  is  a minor release.
  8. CB Leading Index: Friday, 10:00. The index is based on 7 economic indicators, but most of the data has been previously released, so it is unlikely to impact on GDP/USD.

* All times are GMT


GBP/USD Technical Analysis

GBP/USD opened the week at 1.6734.  The pair touched a low  of 1.6640  before reversing directions and climbing to a high of 1.6786.   GBP/USD closed the week at 1.6710, just above support at 1.6705 (discussed last week).

Live chart of GBP/USD:

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Technical lines from top to bottom

We  begin with resistance at  1.7383. This line marked the start of a rally by the pound back in April 2006, which climbed as high as the 2.11 level.

1.7180 has served in a resistance role since October 2008.

1.6990 is next. This line has been  protecting the key 1.70 level and has  held firm  since October 2008.

1.6823  held firm as the pound moved higher late in the week before retracting. This line has some breathing room as the pound trades just above the 1.67 line.

1.6705 continues to see action and was breached again this week. The pair ended the week just above this line, which could see more activity early in the week.

The round number of 1.6600 has some breathing room as the pound trades above the 1.67 line.

1.6475 remains a strong support line. 1.6343 is the next support level.

1.6247  is the final support line for now. It was a key resistance line in October and November 2012.


I am  neutral on GBP/USD.

The pound  continues to  trade at high levels, buoyed by  the British economy, which  continues to produce solid numbers.  US employment numbers looked strong on Friday, and market sentiment remains positive about the US economy.

Further reading: