GBP/USD lost ground last week, and touched a 5-week low. The upcoming week is light, with four events. Here is an outlook for the highlights of this week and an updated technical analysis for GBP/USD.
It was a busy week in the U.K. Wage growth improved to 3.5%, its highest gain since July 2008. CPI remained steady at 1.9%, just shy of the estimate of 2.0%. Retail sales sparkled with a gain of 1.1%, crushing the estimate of -0.3%. Despite the positive data, the pound lost ground.
U.S. numbers enjoyed a solid week. Consumer spending rebounded in March, after posting declines in February. Retail sales jumped 1.6%, above the estimate of 0.9%. Core retail sales gained 1.2%, beating the forecast of 0.7%. As well, unemployment claims sparkled with a reading of 199 thousand. This was only the second reading below the 200-K level in 2019.
GBP/USD daily graph with resistance and support lines on it. Click to enlarge:
- Public Sector Net Borrowing: Wednesday, 8:30. The indicator has been a pleasant surprise of late, posting two straight surpluses. Another surplus is expected in March, with an estimate of GBP 0.8 billion.
- CBI Industrial Order Expectations: Thursday, 10:00. The Confederation of British Industry’s latest figure was a disappointment: 1 point, down from 6 points a month earlier. This indicates that the manufacturing sector is slowing down. Better news is expected in April, with a forecast of 3 points.
- High Street Lending: Friday, 8:30. The figure represents around 60% of all UK mortgages and is released ahead of the official numbers. The February reading of 35.3 thousand missed expectations and was the smallest gain since April 2013. A stronger gain of 38.7 thousand is projected for March.
- CBI Realized Sales: Friday, 10:00. The CBI gauge of sales plunged in March, with a score of -18 points. This indicates a sharp decrease in sales volume. A flat reading of zero is expected in April.
* All times are GMT
GBP/USD Technical analysis
Technical lines from top to bottom:
The round number of 1.34 has held in resistance since June 2018.
1.3375 was a high point in July. It is followed by the round number of 1.3300 which saw activity during the week.
1.3217 was the high point of the pound rally in late January.
1.3170 was a swing high in early November.
1.3070 was a high point in mid-November.
1.2910 has held in support since mid-February,
1.2850 capped recovery attempts in late November.
1.2728 was active in the first half of January.
1.2616 is the final support level for now.
I remain bearish on GBP/USD
British numbers were positive last week, but this wasn’t enough to prevent the pound from losing ground last week. The Brexit conundrum has been kicked down the road until October, but the uncertainty over Britain’s departure from the EU will likely mean further headwinds for the pound.
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