Employment data, inflation figures and a public appearance by Mervyn King are the highlights of this busy week in the weak Pound. Here’s an outlook for the British events and an updated technical analysis for GBP/USD. GBP/USD daily chart with support and resistance lines marked. Click to enlarge: The rate decision in the past week didn’t provide any excitement. We’ll now get to see if there is any justification for any moves on the rate in the near future. Probably no need for hikes: Nationwide Consumer Confidence: Publication time unknown at the moment. This important survey of consumers always rocks the Pound, despite the strange release time. After reaching a peak of 81 points, this indicator gradually dropped, going down to 56 points last month. A small rise to 59 points is expected now. RICS House Price Balance: Published Monday, 23:00. This indicator shows the balance between areas that are reporting rises in real estate prices and areas which are showing drops. After many positive months, with a peak of +35%, the figure deteriorated and fell to a negative number last month, -8%. This means that house prices are falling in most areas. Another drop is expected now to -11%. CPI: Published Tuesday, 8:30. British inflation has been above the government’s target during most of the year. Andrew Sentance, a member of the MPC, wanted to raise the interest rates to tackle this issue, but Mervyn King, the head of the BoE, dismissed it, and saw inflation sliding back into the 1-3% target. After CPI dropped to an annualized figure of 3.1% last month, it might fully return into range now. Expectations stand on 2.9%. Core CPI is already at 2.6% as of last month and will probably remain unchanged. Retail Price Index (RPI) still high and stands at 4.8%, also lower than the months beforehand. Any figure in the CPI will rock the Pound. Employment data: Published Wednesday, 8:30. After a few great months, the Claimant Count Change, which measures the change in the number of unemployed people, dropped by only 3800 people, sending the Pound down. The fresh figure, for the month of August, will probably be better, -5800. The unemployment rate is expected to remain at 7.8% for a third month in a row. Note that the figure is for July, thus having less impact. The Average Earnings Index will complete the picture with an expected 1.6% gain. Inflation Report Hearings: Begins Wednesday, 9:00. Mervyn King, head of the BoE and some of his colleagues, will appear before the Treasury Committee in the British parliament. This public event takes a few hours – a long time in which the Pound shakes. Apart from talking about inflation (released one day earlier), the members of the BoE will also discuss the state of the economy and the prospects for the future. Retail Sales: Published Thursday, 8:30. This major consumer report has shown neat growth in the past 6 months, usually exceeding expectations. Last month’s excellent 1.1% rise will probably followed by a more modest rise this time, only 0.3%. Consumer Inflation Expectations: Published Thursday, 8:30. This report by the Bank of England is based on a survey of 2000 consumers. Despite being slightly overshadowed by the retail sales figure released at the same time, this indicator tends to have a strong impact. The drop in annual CPI wasn’t felt in this survey – last month’s figure showed a strong rise in inflation expectations – from 2.5% to 3.3%. A drop is predicted this time. CBI Industrial Order Expectations: Published Thursday, 10:00. Closing the week for the Pound, this survey of 550 manufacturers will probably remain in negative territory once again. A negative score means that manufacturers expect a lower sales volume in the future. The figure has been negative for ages, but it has been improving, reaching -14. It’s expected to remain at a similar level now, but it might post a small improvement. All times are GMT. GBP/USD Technical Analysis After a failed attempt to break the 1.5470 line, GBP/USD dropped sharply and eventuall fell below the strong 1.5350 line (mentioned in last week’s outlook) and dipped under 1.53. This was very temporary. The Pound rose back up and peaked around 1.5520 before falling and being supported by 1.5350 once again. After closing at 1.5355, the immediate and strong support line remains 1.5350, which is a critical line once again. It was also a support line in February and a resistance line in March. Looking down, 1.5230 was a significant resistance line in July and is now a major line of support. Below, 1.5120 will provide further support after having this same role in July. Below, 1.5050 line capped the pair on a recovery attempt back in May, and now works as a minor support line. Even lower, 1.4950 provided support in July and is the final line for now. 1.5470 is the immediate resistance on the upside. It also stopped the pair in July. 1.5520, which was a peak in April became a strong line once again. Higher, the veteran 1.5720 line that provided support in 2009 is the next line of resistance. Above, 1.5833, which worked as support at the beginning of the year and later worked as resistance, is the next line. Higher, the psychological round number of 1.60 proved to be a tough barrier and is the highest level in 6 months, and is the last line for now. I remain bearish on GBP/USD. This very busy week, with inflation and Mervyn King’s appearance, could provide the data to send the Pound out of range – downwards. 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 Australian dollar (Aussie), check out the AUD/USD forecast. For the New Zealand dollar (kiwi), read the NZD/USD forecast. For USD/CAD (loonie), check out the Canadian dollar forecast. Want to see what other traders are doing in real accounts? Check out Currensee. It’s free.. 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 Forecast share Read Next Winners Edge Trading Announces New Forex Trading Competition Yohay Elam 12 years Employment data, inflation figures and a public appearance by Mervyn King are the highlights of this busy week in the weak Pound. Here's an outlook for the British events and an updated technical analysis for GBP/USD. GBP/USD daily chart with support and resistance lines marked. Click to enlarge: The rate decision in the past week didn't provide any excitement. We'll now get to see if there is any justification for any moves on the rate in the near future. Probably no need for hikes: Nationwide Consumer Confidence: Publication time unknown at the moment. 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