The British pound reached higher ground, although the ride was very bumpy. The upcoming week provides a view into the decision on QE2, inflation figures and more. Here is an outlook for the British events, and an updated technical analysis for GBP/USD. While the rise in jobless claims was smaller than expected, the unemployment situation remains very worrying in Britain. Also manufacturing continues to slump. A point of light was a smaller trade balance deficit. GBP/USD daily chart with support and resistance lines marked. Click to enlarge: Rightmove HPI: Sunday, 23:00. Although not considered the most accurate house price index available in the UK, Rightmove’s early publication makes it important. After two months of relatively strong drops, prices rose by 0.7% last month. Another small rise is likely now. CPI: Tuesday, 8:30. After the decision to embark on more QE, and the acknowledgement that CPI might exceed 5%, only a huge jump can boost the pound. The annual pace of price rises is expected to remain at 4.5%, like last month. Core CPI is likely to tick down from last month’s 3.1% and the Retail Price Index (RPI) is predicted to edge down as well from 5.2%. MPC Meeting Minutes: Wednesday, 8:30. After a very long time with no changes in policy, the decision to inject 75 billion pounds into the economy was a meaningful move that crashed the pound (although it recovered since then). The meeting minutes will reveal how many members voted for this decision. Up to October’s meeting, only one member voted for more QE. Adam Posen wanted an additional 50 billion pounds of injection for a long time, and finally got more than he had expected. Hints about future policy will also be provided in this important release. Retail Sales: Thursday, 8:30. Consumers in the UK remain cautious. After a rise of 0.2% two months ago, the volume of sales dropped by the same scale last month. A small rise is likely now, but the general picture isn’t pretty. Public Sector Net Borrowing: Friday, 8:30. The current government in Britain vowed to curb the deficit budget. Lower deficits help the pound. Reality is a bit different. Last month’s 13.2 billion deficit came out high than expected. A smaller deficit is likely now. * All times are GMT. GBP/USD Technical Analysis Pound/dollar had a nice start to the week, but then retreated and found support above the 1.5530 line (mentioned last week. The second move already saw a break higher with the 1.5780 area providing resistance. Technical levels from top to bottom We start from a higher level this time: 1.62. This round number worked in both directions during many months of range trading. 1.6110 is another significant line that served better as support. The round number of 1.60 follows, and it’s getting closer. Also this line worked well in both directions during 2011. 1.5910, which was a peak many months ago, gave a fight, but was eventually broken and is distinct line separating ranges. Any recovery attempt will meet fierce resistance here. 1.5823, which worked as stubborn support early in the year is now minor resistance. It is closely followed by the swing low of 1.5780, a minor resistance in 2010, which is high resistance now. 1.5706 was a previous low and proved to work as strong resistance. 1.5633 worked as support during September was only very temporarily breached in October. It is followed by 1.5530 which was the bottom line of the recent range, and had a similar role back in 2010. It now turns into support. 1.5480 has a minor role as support after working as resistance a long time ago. It managed to hold the pound down for some time in October and is a minor line. 1.5350 provided strong support at the beginning of the year but is now more vulnerable. The new year to date low of 1.5271 is now strong support. Lower, 1.5120 was a stepping stone for the pound on the way up. The last line is very round 1.50. I am bearish on GBP/USD. While the pound enjoyed the weakness of the greenback, the situation in Britain is far from pleasing. Apart from the rise in unemployment, the full effect of QE2 in Britain hasn’t been unleashed. In addition, British banks also have some exposure to Greece and are no safe haven. 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 GBP/USD (cable), look into the British Pound 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/CHF Outlook – October 17-21 Yohay Elam 11 years The British pound reached higher ground, although the ride was very bumpy. The upcoming week provides a view into the decision on QE2, inflation figures and more. Here is an outlook for the British events, and an updated technical analysis for GBP/USD. While the rise in jobless claims was smaller than expected, the unemployment situation remains very worrying in Britain. Also manufacturing continues to slump. A point of light was a smaller trade balance deficit. GBP/USD daily chart with support and resistance lines marked. Click to enlarge: Rightmove HPI: Sunday, 23:00. 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