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Forex - GBP/USD weekly outlook: March 22-26

Published 03/21/2010, 11:01 AM
GBP/USD
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Investing.com – The pound rose against the U.S. dollar early last week, only to erase its gains later in a steep decline to the 1.5 mark, after a Bank of England policy maker said there was some risk of a double-dip recession in Britain.

After hitting 1.5382, Wednesday's high and a 2-week high, GBP/USD sank back to reach 1.5009 at the close of trade on Friday.

Cable is likely to find support at 1.4781, the low of March 1 and a 10-month low, and resistance at 1.5575, the high of Feb. 23.

Next week, the United States is set to release key data on durable goods orders, new homes sale and existing home sales. The country will also publish a weekly report on unemployment claims, and the Federal Reserve chairman, Ben Bernanke, is set to testify in Washington.

The British government, meanwhile, is due to unveil its annual budget next week. Britain is also due to publish key inflation and retail sales data, and an industry group is scheduled to release a report on U.K. mortgage approvals.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect cable.

Monday, March 22

U.S. Treasury Secretary Timothy Geithner is set to speak about financial reforms to a Washington-based think tank, the American Enterprise Institute.

Tuesday, March 23

Britain will release annual consumer price index data, a key measure of inflation. The Confederation of British Industry, a non-profit interest group, will publish a report on wholesaler and retailer sales. A British industry group will also publish a report on U.K. mortgage approvals.

Later in the day, the National Association of Realtors will publish a key report on sales of existing U.S. homes, a leading indicator of economic health. The U.S. Federal Housing Finance Agency, meanwhile, will publish its monthly housing price index.

Wednesday, March 24

Britain's government will announce its annual budget, which comes weeks ahead of an election and as the country seeks to reassure financial markets that it can tackle its record budget deficit.

Also Wednesday, the U.S. Census Bureau will release key data on new home sales, a leading indicator of production, and core durable goods orders.

Thursday, March 25

Britain will publish important data on retail sales, the primary gauge of consumer spending – which accounts for the majority of overall economic activity.

Also Thursday, the U.S. will then release a key weekly report on initial jobless claims, after which Bernanke will testify before the House Financial Services Committee in Washington, DC, on the unwinding of emergency Fed liquidity programs and the implications for economic recovery.

Friday, March 26

Britain will publish revised data on the change in the total inflation-adjusted value of capital investments made by businesses and the government.

Later Friday, the U.S. will release final quarterly GDP data, and the University of Michigan will publish the revised reading of its Consumer Sentiment index.

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