GBP/USD showed limited movement last week, closing the week just above the symbolic 1.30 level. There are five events on the schedule in the upcoming week. Here is an outlook for the highlights and an updated technical analysis for GBP/USD.

The U.K. posted a host of weak numbers last week, but the pound managed to escape with only slight losses. The monthly GDP report showed a contraction of 0.3% in November, shy of the estimate of zero. Manufacturing Production declined by 1.7%, its sharpest decline since March. There was no relief from key consumer indicators. CPI slowed to 1.3%, its weakest gain since November 2016. The week ended with retail sales, which declined by 0.6% for a second straight month. Analysts had projected a gain of 0.5%.

Over in the U.S., consumer numbers were in the spotlight. Retail sales, the primary gauge of consumer spending, were positive in December. The headline reading improved to 0.3%, up from 0.2% a month earlier. Core retail sales impressed with a gain of 0.7%, above the estimate of 0.5%. The strong numbers were a result of a late-holiday shopping spree by consumers. Consumer inflation has been losing ground and remains below the Federal Reserve target of 2.0 percent. The downturn continued in December. CPI slowed to 0.2%, compared to 0.3% a month earlier. Core CPI dipped to 0.1%, down from 0.2%.

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

1. Employment Reports: Tuesday, 9:30. Wage growth has slipped in the second half of 2019 and fell to 3.2% in October. This was sharply lower than the 3.6% gain in September. The downward trend is expected to continue in November, with an estimate of 3.1%. Unemployment rolls fell to 28,800 in November, but this was higher than the forecast of 21,200. Analysts are braced for a weak release in December, with an estimate of 33,400.
2. Public Sector Net Borrowing: Wednesday, 9:30. The UK’s budget deficit narrowed to GBP 4.9 billion in November, lower than the estimate of 5.2 billion. This was down sharply from the deficit of GBP 10.5 billion a month earlier. The deficit is expected to drop to 4.5 billion in December.
3. CBI Industrial Expectations: Wednesday, 11:00. Manufacturers expect order volume to continue to decrease. In December, the indicator came in at -28 pts. The estimate for January stands at -25 pts.
4. Flash Manufacturing PMI: Friday, 9:30. The British manufacturing sector continues to sputter. The PMI slipped to 47.4 in December, shy of the estimate of 49.1 pts. This points to contraction in manufacturing. The forecast for January stands at 48.8 pts.
5. Flash Services PMI: Friday, 9:30. The PMI remains below the 50-level, which separates expansion from contraction. In December, the index improved to 49.0 and is expected to improve to 51.1 pts.

GBP/USD Technical analysis

Technical lines from top to bottom:

We start with resistance at 1.3375. This line has held since mid-December, when the pound went on an extended slide. 1.3300 is next.

1.3170 has been in a resistance role since the first week in January.

1.3070 remains relevant and was tested in resistance late in the week.

1.3000 (mentioned last week) is fluid. Currently, it is an immediate support level.

1.2910 has held in support since early December. 1.2850 is next.

1.2728 has provided support since mid-October.

1.2616 is the final support level for now.

I remain bearish on GBP/USD

It has been a rough start to the year for GBP/USD, which is down close to 2%. With economic data pointing to a slowdown in the British economy, I expect the pound to be under pressure.