After testing lower ground, the pound bounced off support and managed to stabilize. 8 events are awaiting cable traders this week. Here’s an outlook for these events and an updated technical analysis for GBP/USD. Inflation is heating again in the UK, after a one month break. On the other hand, a big rise in jobless claims is quite worrying. What direction will the pair pick? Let’s start: GBP/USD daily chart with support and resistance lines on it. Click to enlarge: Nationwide HPI: Publication time unknown at the moment, 8:30. This house price index is rather accurate. After two months of nice rises, Nationwide has reported a disappointing drop of 0.2% last time. A small rise is expected now in this troubled sector. Public Sector Net Borrowing: Tuesday, 8:30. The government vowed to fight public debt, and imposed severe austerity measures. In the meantime, we’ve seen only one month of surplus, in January. In April, the total borrowing climbed to 16.4 billion pounds. A similar deficit is expected now, and this will likely weigh on the pound. Inflation Report Hearings: Tuesday, 9:00, onwards. BOE governor Mervyn King will arrive in parliament with a few of his colleagues and will lay out his views on inflation and on the economic situation in general. The long hearings, that also consist of questions, are likely to trigger a lot of action. King usually hurts the pound, but his recent inflation report was relatively positive for the currency. CBI Realized Sales: Tuesday, 8:30. The Confederation of British Industry had an upbeat tone lately. The recent number surprised with a jump to 21 points, indicating strong growth in sales. A correction is likely now. GDP: Wednesday, 8:30. The first release of GDP showed that the British economy grew by 0.5% in Q1, virtually erasing the contraction seen in Q4 of 2010. The second release will likely confirm the first one. Any change will rock the pound in this sensitive publication. BBA Mortgage Approvals: Wednesday, 8:30. The British Bankers’ Association represents around two thirds of British mortgages, making this release important for the pound, despite the simultaneous release of GDP. The past two months were stronger than beforehand, with approvals rising above the 30K mark. A small dip is expected from last month’s 31.7K figure. Business Investment: Wednesday, 8:30. This official number has undergone huge revisions of late. In Q4, a drop of 2.5% was initially reported, and it was later modified to 0%. A small drop is expected now, in this gauge of economic activity for Q1. GfK Consumer Confidence: Thursday, 23:00. This is one of the most pessimistic surveys, remaining in negative ground for ages. After gradual improvements, it has retreated again, reaching -31 points. A small improvement is expected, but the minus sign will likely stay, meaning pessimism in Britain. GBP/USD Technical Analysis Choppy trading characterized the past week in the pound/dollar. The pair tested the 1.6110 line (mentioned last week) and was capped by the 1.6280 region, eventually closing at 1.6224. 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 just now, and having a role in the past as well. 1.6530 capped recovery attempts in recent weeks, and will have a similar role on rises now. A more pivotal line is 1.6430, which worked in both directions in recent months and was breached for quite a short time now. Pivotal areas: the veteran 1.6280 to 1.63 is quite close, and will cap any recovery at the beginning of the week. It was a peak several times in recent months. Further below, 1.6110 is another veteran line. It was tested just now and proved to be very strong. 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. As seen in recent employment figures, the economy is still weak.The MPC remains reluctant to raise the rates on this background, especially as it now loses its biggest hawk, Andrew Sentance. FX Tech Strategy sees a bearish sentiment in the short term. 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/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 USD/JPY Outlook -May 23-27 Anat Dror 11 years After testing lower ground, the pound bounced off support and managed to stabilize. 8 events are awaiting cable traders this week. Here's an outlook for these events and an updated technical analysis for GBP/USD. Inflation is heating again in the UK, after a one month break. On the other hand, a big rise in jobless claims is quite worrying. What direction will the pair pick? Let's start: GBP/USD daily chart with support and resistance lines on it. Click to enlarge: Nationwide HPI: Publication time unknown at the moment, 8:30. This house price index is rather accurate. 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