The pound managed to make its way up, riding on the greenback’s weakness. The upcoming week consists of key PMI figures. Is the economy still slowing? Here’s an outlook for the major market movers and an updated technical analysis for GBP/USD. Q1 growth was confirmed at 0.5%, but the overall picture is still worrying. Realized sales and consumer confidence cheered the pound. There are many skeptics. Let’s start: GBP/USD daily chart with support and resistance lines marked. Click to enlarge: Halifax HPI: Publication time unknown at the moment. This is one of the more accurate house price indices, as it is based on the internal figures from HBOS. After a few month of modest changes, the plunge of 1.4% seen last month was a big warning sign. A small correction is likely now, but note that another fall will hurt the pound. Inflation Report Hearings: Tuesday, 10:30. This hearing was delayed from last week. Mervyn King and some of his colleagues from the Bank of England will appear in parliament to discuss inflation, growth and overall state of the economy. King is usually pessimistic, downplaying inflation and weakening the pound. Will it happen again? Manufacturing PMI: Wednesday, 8:30.Manufacturing pushed the economy forward for a few months, with PMI figures above 60, indicating very strong growth. But in the past two months, a significant slowdown has been seen, with the score dropping quickly down to 54.6 points. Another drop is likely now, but the number is likely to stand above 50 points separating contraction from growth. Net Lending to Individuals: Wednesday, 8:30. Somewhat overshadowed by PMI, this still is a leading indicator of economic activity. A very modest expansion of 500 million was recorded last month, weaker than expectations and weaker than previous months. A similar number is likely now. Construction PMI: Thursday, 8:30. At one point, there were hopes that the construction sector would lead the economy forward. This didn’t happen, and this sector is lagging behind. It disappointed with a drop of more than 3 points last month to 53.3, too close to the 50 point mark. A small rise is expected now. Another drop will weigh heavily on the pound. Services PMI: Friday, 8:30. The most important sector is kept for last. This large sector has been quite unstable. After falling to 52.6 points, it jumped above 57 and fell to 54.3 last month. These big changes in activity will likely continue now. Official expectations are for a small rise, but so any bigger move will rock the markets, just before the US NFP. * All times are GMT. GBP/USD Technical Analysis Cable began the week with a drop under the 1.6110 line (mentioned last week), but it recovered quickly and gradually advanced, challenging the 1.6430 line. 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. This area will be the key at the beginning of the week. The veteran 1.6280 to 1.63 isn’t too far off, 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’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. The details of the British growth remain very worrying. More weak PMIs, following the trend, can push a rate hike further ahead in the year, despite rising inflation. FX Tech Strategy still sees the bears under control. 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 Expert score 5 Etoro - Best For Beginner & Experts0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 5 Read Review Open My Free Account Your capital is at risk. GBP USD ForecastMajors share Read Next USD/CAD Outlook May 30 – June 3 Anat Dror 10 years The pound managed to make its way up, riding on the greenback's weakness. The upcoming week consists of key PMI figures. Is the economy still slowing? Here's an outlook for the major market movers and an updated technical analysis for GBP/USD. Q1 growth was confirmed at 0.5%, but the overall picture is still worrying. Realized sales and consumer confidence cheered the pound. There are many skeptics. Let's start: GBP/USD daily chart with support and resistance lines marked. Click to enlarge: Halifax HPI: Publication time unknown at the moment. 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