GBP/USD moved upwards during the week, but gave up almost all of those gains, closing at 1.5615. The upcoming week is a quiet one, with just four releases. Here is an outlook for the upcoming events, and an updated technical analysis for GBP/USD.

After showing some strength during the week, the pound was hobbled by some disappointing data at the end of the week, including very poor Retail Sales and a Public Sector Net Borrowing release which posted a wider deficit than expected.

GBP/USD graph with support and resistance lines on it. Click to enlarge:  

1. BBA Mortgage Approvals: Tuesday, 8:30. The indicator has been fairly steady over the past several readings. The market forecast calls for a slight increase in the July release.
2. Preliminary GDP: Wednesday, 8:30. This key release has posted a decline of 0.2% for two straight readings. The markets are predicting no change in the July release. Another decline in GDP would signify a sustained decline in UK economic activity, and could hurt the British pound.
3. CBI Industrial Order Expectations: Wednesday, 10:00. This indicator is mired in deep negative territory, and little change is expected in this month’s release.
4. Nationwide HPI: 27th-31st. This housing inflation index posted a very weak figure of -0.6% in June. The markets are predicting a rebound in June, with an estimate of a 0.8% increase.

*All times are GMT

GBP/USD Technical Analysis

GBP/USD opened the week at 1.5580. After dropping to a low of 1.5517, GBP/USD rose to a high of 1.5737, as the resistance line of 1.5750 (discussed last week) held firm. The pair then retraced, closing the week almost unchanged at 1.5615.

Technical levels from top to bottom

We start with resistance at 1.6060. Below, is the line of 1.5992, protecting the important 1.60 level. This is followed by resistance at 1.5930. The next resistance line is just above the 1.58 line, at 1.5805. This line was last breached in late May, as the pound went on a sharp slide.

Close by is 1.5750, which held firm as the pound made a brief push upwards early in the week. Next, 1.5648 which has been alternating between support and resistance roles, is currently providing resistance following the strong surge by the dollar.

This is followed by the round figure of 1.5600, which is providing the pair with weak support. It looks to be tested if the pound shows some weakness. Next, there is support at 1.5521. This line was briefly breached by GBP/USD as the pair fell before retracing. Below, the pair is receiving support at 1.5415. This is followed by support at 1.5361, a line which has held firm since early June. Close by, there is strong support at 1.5309. This line has not been breached since September 2010.

The next support level is at 1.5229. This is followed by 1.5124, which has not been tested since July 2010. Below, there is support at 1.5054, which was last breached in June 2010. The final support level for now is 1.4891.

I am bullish on GBP/USD.

GBP/USD has shown some strength, recently, not including a drop at the end of last week following some poor UK data. The markets are very concerned over a host of poor US releases, and the pound could benefit if the US economy continues to struggle. If UK data does not continue to disappoint, the pound could move upwards against the dollar.

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 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 forecast.
• For the Swiss franc, see the USD/CHF forecast.