GBP/USD enjoyed a good week, climbing close to 1 percent last week. The upcoming week has six releases, including GDP. Here is an outlook for the highlights and an updated technical analysis for GBP/USD.

British GDP reports were stronger than expected. The economy grew by 1.0% in Q4, better than the estimate of 0.5%. The monthly GDP rose 1.2%, beating the estimate of 1.0%. Still, the economy contracted by 9.9% in 2020, the sharpest annual contraction on record. Manufacturing Production expanded for an eighth consecutive month, but the December gain was a weak 0.3%.

In the US, inflation numbers were a bit lower than expected, and the US dollar’s response was muted. Headline inflation dipped from 0.4% to 0.3%, while Core CPI fell from 0.2% to 0.0%. Unemployment claims rose for the first time in four weeks, rising from 779,000 to 793,000. The week wrapped up on a down note, as UoM Consumer Sentiment for January dropped from 79.2 to 76.2 points. It was the lowest level since July 2020.

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

1. Inflation Report: Wednesday, 7:00. Headline inflation improved from 0.3% to 0.6% in December and another solid gain is expected in January, with a forecast of 0.5%. Core CPI rose from 1.1% to 1.4% in December. The estimate for January stands at 1.2%.
2. GfK Consumer Confidence: Friday, 00:01. The index remains mired in negative territory, as the British consumer is pessimistic about the economy. The indicator came in at -28 in January and is expected to improve marginally in February, to -26 points.
3. Retail Sales: Friday, 7:00. Retail sales posted a weak gain of 0.3% in December and analysts are bracing for a dismal January, with a forecast of -2.6%. A significant decline could weigh on the British pound.
4. Services PMI: Friday, 9:30. Services fell sharply in December, from 49.9 to 38.8. A reading below the 50-level indicates contraction. The January forecast stands at 42.3.
5. Manufacturing PMI: Friday, 9:30. Manufacturing remains in expansion mode but did fall to 52.9 in December. The street consensus for January is 53.1.
6. CBI Industrial Order Expectations: Friday, 11:00. Order volume sank to -38 in January, down from -25 beforehand. The estimate for February is at -38.