GBP/USD reversed directions and gained 70 points. The pair closed at 1.2882. This week’s key events are Services PMI, the parliamentary election and Manufacturing Production. Here is an outlook for the highlights of this week and an updated technical analysis for GBP/USD.
In the UK, manufacturing and construction PMIs continue to point to expansion. Over in the US, the CB Consumer Confidence report dropped and missed the estimate. Nonfarm Payrolls was a major disappointment, as the gain of 138 thousand was well below expectations.
GBP/USD graph with support and resistance lines on it. Click to enlarge:
- CPI: Tuesday, 4:30. The PMI improved to 55.8 in April, pointing to expansion in the services sector. The index is expected to dip to 55.1 in the May report.
- PPI Input: Tuesday, 4:30. The indicator broke a trend of three straight declines, posting a gain of 5.6% in April. Will we see another gain in the May report?
- RPI: Tuesday, 4:30. The indicator continues to dip, and came in at 1.79% in the March release. Will the downward trend continue in June?
- Average Earnings Index: Wednesday, 4:30. This housing price index is a useful gauge of the level of activity in the housing sector. The indicator has not impressed in 2017, with a weak gain of 0.1% marking its strongest release. The estimate for the May report stands at -0.2%.
- Claimant Count Change: Wednesday, 4:30. The indicator remained unchanged in April, recording a gain of 22%. The forecast for May is 20%.
- CB Leading Index: Wednesday, 9:30. Britain goes to the polls on Thursday, with Prime Minister Theresa May expected to win a majority. Still, if her Conservatives do not win as many seats as expected, the pound could respond with losses.
- Retail Sales: Thursday, 4:30. This key indicator has struggled, posting three straight declines. The markets are expecting better news in April, with an estimate of 0.8%.
- Official Bank Rate: Thursday, 7:00. Britain’s trade deficit widened to GBP 13.4 billion in March, above the estimate of GBP 11.7 billion. The deficit is expected to narrow to GBP 12.0 billion in the April release.
- Asset Purchase Facility: Thursday, 7:00. This monthly indicator helps analysts predict GDP, which is released on a quarterly basis. The indicator dipped to 0.2% in April, down from 0.5% a month earlier.
- BoE Quarterly Bulletin: Friday, 7:00.
*All times are GMT
GBP/USD Technical Analysis
GBP/USD opened the week at 1.2928 and touched a low of 1.2767, testing support at 1.2775 (discussed last week). The pair then reversed directions and climbed to a high of 1.2921. GBP/USD closed the week at 1.2882.
Technical lines from top to bottom
1.3247 has held in resistance since September 2016.
1.3112 marked a low point in June 2016 as the pound crashed after the Brexit vote.
1.3020 is protecting the symbolic 1.30 level.
1.2902 is next.
1.2775 was tested in support for a second straight week.
1.2616 is next.
1.2512 is the final support level for now.
I am bearish on GBP/USD.
Britain remains shaken from the terrorist attack in London and with polls pointing to a tight race, the political uncertainty could hurt the pound. Although the markets have priced in a rate hike from the Fed, the move could still give the greenback a brief boost.
from Forex Crunch http://feedproxy.google.com/~r/ForexCrunch/~3/65l3To74Mpo/
from Online Forex Trading Resource
View thesource article here