GBP / USD fell sharply over the weekend and the pair ended the week just above the 1.38 line. The coming week has four versions, including the BoE rate decision. Here is an overview of the highlights and an updated technical analysis for GBP / USD.
The Confederation of British Industry’s sales report finally entered positive territory after six consecutive declines. Sales volume rose to +20 in April, down from -45 points. This easily beats the estimate of +9.
In the United States, consumer confidence soared, with the Consumer Board’s Consumer Confidence Index climbing to 121.7 from 113.1 previously. The US dollar fell after the FOMC meeting, with the Fed saying it was premature to discuss the cut.
US GDP grew 6.4%, beating the forecast of 6.1%. The robust reading was another sign that the economic recovery in the United States is in full swing.
GBP / USD daily chart with support and resistance lines. Click to enlarge:
- Manufacturing PMI: Tuesday, 8:30 a.m. Manufacturing continues to show strong growth. The PMI rose to 60.7 in April from 58.9. Further reading should confirm the initial publication.
- PMI Services: Thursday, 8:30 a.m. The index continues to accelerate with the reopening of the UK economy. The PMI rose to 60.1 in April, and the second estimate stands at 60.2 points.
- BoE pricing decision: Thursday, 12:00 p.m. The BoE is generally expected to keep the official cash rate at 0.10% and asset purchases at £ 895 billion. The economy is doing significantly better than the last meeting, which took place in March, thanks to a successful vaccine rollout. The bank is not expected to decline in the next meeting, but if policymakers do, the pound could rise significantly. The BoE is expected to keep interest rates at 0.10%.
- PMI construction: Tuesday, 8:30 a.m. Construction accelerated in March, going from 53.3 to 61.7 points. The estimate for April is 62.0, indicating strong growth.
Technical lines from top to bottom:
We start with resistance at 1.4070.
1.3956 is next.
1.3824 (mentioned last week) is the first level of support.
1.3726 is next.
1.3612 is the final support level at this time.
I am neutral on the GBP / USD pair
The economies of the United States and the United Kingdom continue to improve. If the BoE shrinks or hints at tighter policy, the pound could be significantly improved this week.