It was a roller-coaster week for GBP/USD, which posted sharp losses but then recovered. The upcoming week has just one release. Here is an outlook for the highlights and an updated technical analysis for GBP/USD (FXB, UDN, UUP).

The Brexit talks went down to the wire, but in the end the European Union and UK finally hammered out an agreement on Thursday, just before the UK leaves the bloc on December 31st. There were fears that a deal might not be reached, which triggered losses for the pound earlier in the week.

Retail sales volume improved thanks to the Christmas season, rising from -25 in November to -3 in December. However, the outlook for January is grim with an estimate of -33 points. Final GDP for the second quarter was revised upwardly to 16.0%, up from 15.5%. This was a sharp rebound from the Q2 release of -19.8%. The UK current account deficit ballooned to GBP 15.7 billion in Q3, up sharply from 2.8 billion in the previous quarter.

In the US, Congress approved a massive stimulus package, but President Trump has thrown a monkey wrench in the process, saying he will veto the bill unless stimulus payments are substantially increased.

US Final GDP for the third quarter was revised upwards to 33.4%, up from 33.1%. Durable goods orders weakened in November, Headline durables dropped from 1.3% to 0.9%, while the core reading slumped to 0.4%, down from 1.3%. Consumer numbers worsened, as Personal Income came in at -1.1% and Personal Spending declined by 0.4%, its first decline in seven months. Unemployment Claims dropped sharply to 803 thousand, well below the estimate of 882 thousand..

GBP/USD daily graph with resistance and support lines on it. 

1. Nationwide HPI: Wednesday, 9:00. This housing inflation gauge came in at 0.9% in November but is projected to slow to 0.4% in December. .

GBP/USD Technical Analysis

Technical lines from top to bottom:

We start with resistance at 1.3812.

1.3769 has held in resistance since May 2018.

1.3624 is next.

1.3502 (mentioned last week) is the first line of support.

1.3340 is next.

1.3249 saw action earlier in December.

1.3145 is the final support level for now.

I am neutral on GBP/USD

A Brexit deal is finally in the books, which removes the significant downside risk to the pound in the event that a deal was not reached. We can expect a subdued week, with light trading in the final week of the year.