Too many negative signs for the British economy sent the pound down. We’re now expecting more important figures, with Mervyn King’s inflation report expected to rock the currency. Will King pound the pound and lower growth forecasts? Here’s an outlook for the British events,and an updated technical analysis for GBP/USD, now on lower ground. All three PMIs were bad: manufacturing, construction and services. Also house prices and lending point to a slowdown. Is this the beginning of a big fall? Let’s start: GBP/USD chart with support and resistance lines on it. Click to enlarge: Nationwide Consumer Confidence:Publication time unknown at the moment. This survey of 1000 consumers has finally ticked up last month after many disappointing and worrying months of falls. The Nationwide Building Society is now expected to show another rise from the score of 44 points seen last month. Halifax HPI: Publication time unknown at the moment, delayed from last week. This is one of the most accurate house price indicators. The big HBOS bank uses its internal mortgage data for this index. House prices ticked up by 0.1% last month, and are expected to edge up by 0.2%, not too impressive RICS House Price Balance: Monday, 23:00. RICS has a different method of measuring trends in house prices – it provides a number that reflects the balance across the country by its different regions. After reaching a very low number of -49% a few months ago, this negative number is lower now, only -23%, and is likely to tick up to -22%. BRC Retail Sales Monitor: Monday, 23:00. This mini-retail sales release often forecasts the official numbers. A very disappointing drop of 3.5% was reported by the British Retail Consortium, triggering serious worries. A small correction is likely now. Trade Balance: Wednesday, 8:30. Last moth’s drop to a deficit of only 6.8 was quite encouraging, after the deficit neared 10 billion pounds. It’s now predicted to grow again to 7.4 billion. BOE Inflation Report: Wednesday, 9:30. This release will likely hurt the pound. The quarterly inflation report consists not only of inflation expectations but also growth forecasts. Both are expected to be weak, reflecting the current state of the economy, especially as the governor of the BOE, Mervyn King, sees it. The publication of the report will be accompanied by a press conference by King. He usually pounds the pound. Manufacturing Production: Thursday, 8:30. Purchasing managers in the manufacturing sector have shown their pessimism and expectations for a slowdown. Nevertheless, some growth is till expected here, 0.3%. Contraction in manufacturing output could add some weight on the pound. The wider, but less influencing figure of industrial output is expected to rise by 0.9% after dropping by 1.2% last month. NIESR GDP Estimate:Thursday, 14:00. This independent think tank publishes its unofficial yet up to date GDP estimations for the three months that ended just now. For Q1, they were more optimistic than the initial official figure, showing a gain of 0.7% instead of 0.5%. A slower growth rate is expected for the 3 months that ended in April. * All times are GMT. GBP/USD Technical Analysis Pound/dollar began the week in a high range, above the 1.66 line (discussed last week). But after losing this line, it lost a lot of ground and eventually closed at 1.6364. Technical levels, from top to bottom: The 2009 peak of 1.7042 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 support, despite temporary breaches just now. 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 just now and also 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 tested just now. The veteran 1.6280 to 1.63 is quite close, and will likely cushion falls. It was a peak several times in recent months. Further below, 1.6110 is another veteran line, which had a chance to work as support recently. 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 and 1.5750. I am bearish on GBP/USD. Mervyn King didn’t need the recent negative signs about the fragile state of the economy to keep interest rates at the historic low. With the dollar looking as it has turned the tables, the pound is likely to fall. 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 9-13 Anat Dror 12 years Too many negative signs for the British economy sent the pound down. We're now expecting more important figures, with Mervyn King's inflation report expected to rock the currency. Will King pound the pound and lower growth forecasts? Here's an outlook for the British events,and an updated technical analysis for GBP/USD, now on lower ground. All three PMIs were bad: manufacturing, construction and services. Also house prices and lending point to a slowdown. Is this the beginning of a big fall? Let's start: GBP/USD chart with support and resistance lines on it. 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