GBP/USD enjoyed its strongest weekly gain in 2017, gaining 270 points. The pair closed the week at the 1.28 level. This week’s key event is Preliminary GDP. Here is an outlook for the highlights of this week and an updated technical analysis for GBP/USD.  

The pound jumped sharply as Prime Minister May shocked the markets by calling a snap election to be held June 8. May is expected to increase the Conservatives’ majority in parliament. In the US, construction figures were mixed and manufacturing and employment numbers missed their estimates.

Updates:

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

1. Rightmove HPI: Sunday, 23:01: This indicator gives a snapshot of the level of activity in the housing sector. The index dropped to 1.3% in March, compared to 2.0% a month earlier.
2. CBI Industrial Order Expectations: Monday, 10:00. The indicator has been pointing to stronger order volume, posting two straight readings of +8 points. The forecast for April stands at +9 points.
3. Public Sector Net Borrowing: Tuesday, 8:30. The UK is expected to post a deficit of GBP 2.6 billion in March, up from GBP 1.1 billion in the February report. A larger deficit than expected could hurt the pound.
4. CBI Realized Sales: Thursday, 10:00. The indicator has pointed to increasing sales volume, with two straight readings of +9 points. The estimate for March stands at +6 points.
5. GfK Consumer Confidence: Thursday, 23:01. Analysts closely monitor consumer confidence, which is linked to consumer spending, a key component of economic growth. The UK consumer continues to show pessimism and came in at -6 points in March.
6. Nationwide HPI: Friday, 28th-5th. This housing inflation indicator declined 0.3% in March, marking its first decline in almost two years. The index is expected to post a small gain of 0.1% in April.
7. Preliminary GDP: Friday, 8:30. GDP reports are among the most important indicators and should be considered market-movers. Final GDP for Q4 came in at 0.7%, matching the forecast. The estimate for Preliminary GDP stands at 0.4%.

*All times are GMT

GBP/USD Technical Analysis

GBP/USD opened the week at 1.2535 and dropped to a low of 1.2512, testing support at 1.2548 (discussed last week). The pair then reversed directions and soared to 1.2905. GBP/USD closed the week at 1.2803.

Technical lines from top to bottom

With GBP/USD posting strong gains last week, we start at higher levels:

1.3247 is providing resistance.

1.3112 marked a low point in June 2016 as the pound crashed after the Brexit vote.

1.3020 is next.

1.2902 remains an immediate resistance line.

GBP/USD broke through resistance at 1.2775 for the first time since December 2016.

1.2548 is the next support line.

1.2345 was a low point in February.

I am bullish on GBP/USD.

With the US economy hitting some turbulence in consumer data, a June rate hike is by no mean a done deal. Trump’s first 100 days in office have disappointed the markets and weighed on the US dollar.