GBP/USD Forecast Jan. 7-11 – Pound Starts Off 2019 With A Shrug, Brexit Countdown Continues

GBP/USD started the New Year with some swings, but ended the week almost unchanged. The key events in the upcoming week are GDP and Manufacturing Production. Here is an outlook for the highlights of this week and an updated technical analysis for GBP/USD.

The pound was down sharply after New Years’ Day, as fallout from the Apple revenue warning sent the equity markets tumbling and sent GBP/USD sharply lower. However, the pound managed to recoup most of these losses before the end of the week.

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

  1. Halifax HPI: Tuesday, 8:30. This housing inflation indicator has struggled, posting two declines in the past three months. The indicator is expected to rebound in December, with an estimate of 0.5%.
  2. NIESR GDP Estimate: Wednesday, Tentative. This monthly gauge of GDP fell to 0.3% in November, its lowest reading since June. Will we see an improvement in December?
  3. BoE Governor Carney Speaks: Wednesday, 15:30. Carney will deliver remarks at a BoE event. A speech that is more hawkish than expected is bullish for the pound.
  4. BRC Retail Sales Monitor: Thursday, 00:01. This indicator gives an indication of the strength of consumer spending, a key driver of economic growth. The indicator declined by 0.5% in November, and a decline of 0.3% is expected in December.
  5. GDP: Friday, 9:30. This indicator is released monthly and should be treated as a market-mover. The estimate for November stands at 0.1%, which was the gain seen in October.
  6. Manufacturing Production: Friday, 9:30. This key event fell 0.9% in October, its weakest showing since April. The markets are expecting a rebound for November, with an estimate of 0.4%.
  7. Goods Trade Balance: Friday, 9:30. In October, the trade deficit ballooned to GBP 11.9 billion, its highest in four months. The forecast for November stands at GBP 11.4 billion.
  8. Industrial Production: Friday, 9:30. The indicator declined 0.6% in October, its worst showing since April. The markets are counting on a rebound for November, with an estimate of 0.3%.
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