GBP/USD showed little movement last week. It’s a busy week in the U.K, with employment, inflation and retail sales reports. Here is an outlook for the highlights of this week and an updated technical analysis for GBP/USD.

Britain and the EU agreed to extend Brexit until October, but with Britain hopelessly divided on what happens next, does the extension really change things? The monthly British GDP report showed that the economy slowed to 0.2% in February, compared to 0.5% a month earlier. There was better news on the manufacturing front, as manufacturing production jumped 0.9%, crushing the estimate of 0.2%.

In the U.S., inflation levels pointed higher in March. CPI, the key gauge of consumer spending, climbed to 0.4%, its highest gain since January 2018. The producer price index also looked strong, climbing 0.6%, marking a 5-month high.

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

1. Employment Data: Tuesday, 8:30. Wage growth has been steady, posting three straight gains of 3.4%. The February estimate stands at 3.5%. Unemployment rolls climbed to 27.0 in February, well above the estimate of 13.1 thousand. A lower reading is expected for March, with an estimate of 17.3 thousand. The unemployment rate is expected to remain pegged at 3.9%.
2. Inflation Data: Wednesday, 8:30. After losing ground in the second half of 2018, CPI has reversed directions in 2019, and improved to 1.9% in February. The upward trend is expected to continue in March, with a forecast of 2.0%. Core CPI came in at 1.8% in February, and is expected to improve to 1.9% in March.
3. Retail Sales: Thursday, 8:30. Retail sales is the primary gauge of consumer spending, a key driver of economic growth. The indicator slowed to 0.4% in February and the markets are bracing for a decline of -0.3% in March.
4. BOE Credit Conditions Survey: Thursday, 8:30. This quarterly report details lending data to consumers and small businesses. An upbeat survey points to stronger economic activity and is bullish for the pound.

GBP/USD Technical analysis

Technical lines from top to bottom:

The round number of 1.34 has held in resistance since June 2018.

1.3375 was a high point in July. It is followed by the round number of 1.3300 which saw activity during the week. It is currently a weak resistance line.

1.3217 was the high point of the pound rally in late January.

1.3170 was a swing high in early November.

1.3070 was a high point in mid-November.

Late in the week, the pair broke through support at the round number of 1.3000 (mentioned last week).

1.2910 has held in support since mid-February,

1.2850 capped recovery attempts in late November.

1.2728 was active in the first half of January.

1.2616 is the final support level for now.

I remain bearish on GBP/USD

Brexit has been extended, but the deadlock in parliament remains, and investors will remain concerned over the political turmoil and uncertainty. The British economy is showing signs of strain, and the pound could lose ground if economic data is not stronger than expected.