GBP/USD moved higher for a second week, gaining almost 100 points. The pair closed at 1.2480. This week’s key events are Current Account and Final GDP. Here is an outlook for the highlights of this week and an updated technical analysis for GBP/USD.  

In the US, Fed Chair Yellen sent a dovish message after the rate hike the dollar, disappointing the markets. Unemployment Claims were unexpectedly weak, soaring to 261 thousand. In the UK, consumer numbers were strong, as CPI and Retail Sales beat their estimates.

Updates:

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

1. Net Lending to Individuals: Wednesday, 8:30: The indicator remained unchanged at GBP 4.8 billion in January, well above the forecast. The estimate for February stands at GBP 4.9 billion.
2. GfK Consumer Confidence: Thursday, 23:01. The indicator continues to post declines, indicative of a pessimistic UK consumer. In February, the indicator came in at -6, and is expected to edge down to -7 in the March report.
3. Nationwide HPI: Friday, 6:00. This index provides a snapshot of the health of the housing sector. The index improved to 0.6% in February, beating the estimate of 0.2%. The forecast for March stands at 0.3%.
4. Current Account: Friday, 8:30. The current account deficit slipped to GBP 25.5 billion in Q4, lower than the forecast of GBP 28.3 billion. The deficit is expected to improve in Q1, with an estimate of a deficit of GBP 16.3 billion.
5. Final GDP: Friday, 8:30. Second Estimate for Q1% improved to 0.7%, above the forecast of 0.5%. The estimate for Final GDP for Q1 stands at 0.7%.

* All times are GMT

GBP/USD Technical Analysis

GBP/USD opened the week at 1.2383 and dropped to a low of 1.2332. The pair then reversed directions and climbed to a high of 1.2351, as resistance held at 1.2385 (discussed last week). GBP/USD closed the week at 1.2478.

Live chart of GBP/USD:

Technical lines from top to bottom

We start with resistance at 1.2775. This line has held since December 2016.

1.2548 is next.

1.2345 was a low point in February.

1.2213 is protecting the 1.22 level.

1.2080 is the final support level for now.

I am neutral on GBP/USD.

In the US, the Fed has sent clear signals that it is projecting two more rate hikes this year. This has disappointed the markets and lowered investors’ appetite for risk. President Trump has failed to pass a key health care bill and remains embroiled in scandal. Stronger inflation in the UK has the BoE giving more consideration to a rate hike later in the year.