The Pound showed weakness in the past week, and is now facing important tests. The upcoming week consists of a rate decision among other important releases. Here’s an outlook for the British events and an updated technical analysis for GBP/USD. GBP/USD daily graph with support and resistance lines on it. Click to enlarge: When the dollar strengthened on Friday’s Non-Farm Payrolls, the Pound suffered. When the dollar later retreated on the disappointing services PMI, the Pound only partially recovered. This is a sign of its weakness. Will it continue downwards this week? Let’s see: Halifax HPI: Publication time unknown. Delayed from last week. This house price index, is one of the most accurate available, as it’s based on internal data from HBOS, one of the biggest banks in Britain. According to the bank, a three month slump in house prices stopped last month with a neat 0.6% rise. But this time, a 0.3% drop is predicted. BRC Retail Sales Monitor: Published on Monday at 23:00 GMT. This indicator serves as hint for the official retail sales figure. It measures the change in volume of sales, but only for the members of the BRC. The index rose nicely in the past three months, but could dip this time, especially after last month’s growth was weak. Manufacturing Production: Published on Wednesday at 8:30 GMT. Manufacturing output disappointed is the past three months by falling short of expectations, or even dropping. This gauge of the economy always rocks the Pound. Last month’s 0.3% rise will probably be followed by a similar rise this time. Note that manufacturing is part of the wider industrial production figure (expected to rise by 0.4% after dropping by 0.5% last time), but manufacturing is in the limelight. NIESR GDP Estimate: Published on Wednesday at 14:00 GMT. The National Institute of Economic and Social Research publishes its highly regarded estimate of GDP every month, filling in the gap for the official government releases. The estimate for the three months that ended in July stood on 0.9%, lower than the official 1.2% growth seen in Q2. We’ll now get news about the three months that ended in August – more information about the third quarter. Trade Balance: Published on Thursday at 8:30 GMT. Britain’s deficit fell from 8 to 7.4 billion last month, boosting the Pound. This time, it’s expected to slip back up to 7.5 billion. A big disappointment can definitely hurt the Pound, as it happened when trade balance deficit jumped in May. Rate decision: Published on Thursday at 11:45 GMT. There’s still only a single member of the MPC that voted for a rate hike – Andrew Sentance. This came in response to the rising inflation, which has weakened recently, as Mervyn King had expected. So, the chances of a rate hike are lower now. The British Official Bank ate will probably stay at 0.50% once again. The wording of the MPC Rate Statement will be interesting to watch, as it may signal the roadmap for an exit strategy. PPI: Published on Friday at 8:30 GMT. PPI Input, the secondary indicator of inflation was negative in the past three months, showing a significant drop in prices. The surprising drop of 1% last month will probably be followed by a 0.2% rise this time. Only a big leap will send a signal that also consumer inflation is on the rise, but this is unlikely – it will probably remain contained – showing that there’s no pressure for a rate hike. PPI Output is also expected to post a small gain – 0.1%. CB Leading Index: Published on Friday at 9:00 GMT. This composite index of 7 economic indicators is based on data that has already been released. Nevertheless, it still has an impact on cable. Last month it rose by 0.5%, and the rise will probably be more moderate now. GBP/USD Technical Analysis The Pound began the week with a failed attempt to stabilize above 1.5520 (mentioned in last week’s outlook). After this failed, GBP/USD lost 1.5470 and continued downwards, supported by the 1.5350 line. A recovery on Friday found it struggling with the 1.5470 line from the other side, and it closed at 1.5450. The Pound fell to a lower range – between 1.5470 which also capped the pair in July, and 1.5520, which was a peak in April and now serves as minor resistance. Looking up, 1.5720, which supported the pair back in 2009 is the next line of resistance. Above, 1.5833, which provided 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. Higher, 1.6080 is the next minor resistance line, after working as support in January. It’s followed by 1.6270, but that’s quite far at the moment. Looking down, 1.5230 was a stubborn resistance line in July and is now a major support line. Lower, 1.5120 will provide further support after having this role in July. The 1.5050 line capped the pair on a recovery attempt in May, and is now a minor support line. Lower, 1.4950 provided support in July and is the final line for now. I remain bearish on GBP/USD. Inflation has softened and doesn’t support a rate hike. Together the pause in employment improvement, the Pound is vulnerable to further losses. 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 EUR/USD Outlook – September 6-10 Yohay Elam 12 years The Pound showed weakness in the past week, and is now facing important tests. The upcoming week consists of a rate decision among other important releases. Here's an outlook for the British events and an updated technical analysis for GBP/USD. GBP/USD daily graph with support and resistance lines on it. Click to enlarge: When the dollar strengthened on Friday's Non-Farm Payrolls, the Pound suffered. When the dollar later retreated on the disappointing services PMI, the Pound only partially recovered. This is a sign of its weakness. Will it continue downwards this week? Let's see: Halifax HPI: Publication time unknown. 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