GBP/USD was down slightly this week, as the pair closed just below the 1.60 line, ending the week at 1.5997. This week has five events, with Preliminary GDP the highlight. Here is an outlook of the upcoming events, and an updated technical analysis for GBP/USD.
Strong UK employment numbers and solid retail sales were not enough to bolster the pound this week. In the US, there was more mixed data, as Unemployment Claims were up, while the well-respected Philly Fed Manufacturing Index climbed to a six-month high.
*All times are GMT
GBP/USD Technical Analysis
GBP/USD opened the week at 1.6057, and the pair rose as high as 1.6157. GBP then retracted, dropping to a low of 1.5996, as the support line of 1.5992 (discussed last week) held firm. The pair closed the week at 1.5997.
Technical lines from top to bottom:
We start with resistance at the round number of 1.66, which was last tested in August 2011. Below, there is resistance at 1.6475. This is followed by the 1.6343 line, which was last breached when the pound dropped sharply in September 2011. We next encounter resistance at 1.6247. Below, is the line of 1.6122, which was breached temporarily this week, as the pound showed some strength before retracting. This is followed by 1.6060, which is providing weak resistance, after providing support just last week.
GBP/USD is receiving weak support at 1.5992. This line has held firm since early September, but looks to be tested if the pound continues to sag. Next is the line at 1.5930. This is followed by support at 1.5805. This line has remained in place since early September. We next find support at 1.5750.
This is followed by support at 1.5648, which saw a lot of action in August. Below, there is support at the round figure of 1.5600, which has held firm since early August. Next is the support line of 1.5530. This line has held firm since August, when the pound started its impressive summer rally. The final support line for now is 1.5414, which was last breached in July.
I am bullish on GBP/USD.
UK releases were solid this past week, and employment and retail sales numbers were strong. The market could react positively to these numbers during the week. As well, there has been some improvement in US numbers, and further good news out of the US would be bullish for the pound.