GBP/USD Forecast Feb. 6-10

GBP/USD reversed directions last week, losing 120 points. The pair closed at 1.2469. This week’s key event is Manufacturing Production. Here is an outlook for the highlights of this week and an updated technical analysis for GBP/USD.

It’s been a rocky start for Donald Trump’s Presidency, who has picked fights with Mexico and Australia but hasn’t outlined economic or fiscal policies. US job numbers were mixed, as Nonfarm Payrolls was better than expected but wage growth was weaker than expected. In the UK, PMIs continued to show expansion. The BoE held rates, but Mark Carney was dovish, saying that future interest rates could move in either direction.

Updates:

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

BRC Retail Sales Monitor: Tuesday, 00:01. This index looks at retail sales volumes in BRC shops. In December, the indicator improved to 1.0%, up from 0.6% a month earlier.

Halifax HPI: Tuesday, 8:30. This indicator provides a snapshot of the strength of the housing sector. In December, the indicator jumped 1.7%, marking its strongest gain in 9 months. The estimate is expected to post a weak gain of 0.2% in January.

RICS House Price Balance: Thursday, 00:01. The indicator dropped in December to 24%, short of the estimate of 32%. Little change is expected in the January release.

30-year Bond Auction: Thursday, Tentative. The 10-year bond rose to 1.96% in December, marking a 3-month high. This was up from the November yield of 1.49%.

Manufacturing Production: Friday, 9:30. This is the key event of the week and should be treated as a market-mover. The indicator rebounded in November, posting a strong gain of 1.3%. This was well above the estimate of 0.6%. The estimate for December stands at 0.3%.

Goods Trade Balance: Friday, 9:30. The UK’s trade deficit widened to GBP 12.2 billion in November, higher than the forecast of a deficit of GBP 11.2 billion. The deficit is expected to narrow to GBP 11.5 billion in the December report.

NIESR GDP Estimate: Friday, 15:00. This monthly report helps analysts predict official GDP releases, which are published every quarter. In December, the indicator edged up to 0.5%, marking a 6-month high. Will the upward trend continue in January?