GBP/USD posted huge gains last week, climbing 2.2 percent. It promises to be a busy week. The U.K. releases CPI and retail sales, and parliament will hold another vote over Brexit. Central banks will also be in focus, with the BoE and Federal Reserve expected to maintain the benchmark rate.Here is an outlook for the highlights of this week and an updated technical analysis for GBP/USD.

There was a flurry of votes in parliament last week, capping what was an extraordinary week in British politics. Lawmakers rejected the government’s withdrawal bill, called for a hard Brexit to be removed as an option, and voted in favor of delaying Britain’s departure from the European Union. The pound jumped as markets were pleased that the no-deal scenario is hopefully off the table. Still, plenty of uncertainty remains. Will the E.U. accept an extension? If so, for how long? Parliament remains deeply divided, and with Prime Minister May’s standing badly battered, it’s unclear how Brexit will unfold.

Overshadowed by the Brexit drama, the U.K. posted some strong numbers. The monthly GDP release rebounded in January, with a strong gain of 0.5%. As well, manufacturing production climbed 0.8% in January, after three straight declines.

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

1. Employment Report: Tuesday, 9:30. Analysts are expecting employment numbers to remain solid. Wage growth has been steady at 3.4% for the past two months, but is expected to slow to 3.2% in January. Unemployment claims are expected to dip to 13.1 thousand, compared to 14.2 thousand in the previous release. The unemployment rate has sparkled at 4.0% for the past two months, and no change is expected.
2. Inflation: Wednesday, 9:30. Inflation has cooled down and decelerated in recent months. The Consumer Price Index fell to 1.8% in January. The same reading is expected or February. Core CPI was at 1.9% and the same gain is expected in the February release. The Retail Price Index dropped to 2.5% in January and no change is expected in February.
3. CBI Industrial Order Expectations: Wednesday,11:00. After a decline in January, the indicator rebounded strongly in February, with a gain of 6 points. The estimate for March stands at 5 points.
4. Retail Sales: Thursday, 9:30. This is the primary gauge of consumer spending. The indicator rebounded in January with a strong gain of 1.0%, above expectations. The markets are braced for a decline of 0.4% in February.
5. Public Sector Net Borrowing: Thursday, 9:30. The U.K. posted a rare budget surplus in January, with a reading of GBP 15.8 billion. A small surplus of GBP 0.3 billion is projected for March.
6. BoE Decision: Thursday, 12:00. The BOE is set to maintain the benchmark rate at 0.75% (raised to this level in August) and the QE program at 435 billion pounds. The Monetary Policy Committee (MPC) voted unanimously to maintain this policy in the previous meeting and the same voting pattern will probably be repeated. If the Monetary Policy summary is on the dovish side, the pound could lose ground.
7. BoE Quarterly Bulletin: Friday, 12:00. This long document about the current economic situation provides more information about the data that BOE uses in making its decision. Some key elements in the report are already out. Nevertheless, it provides more information from the Bank, a day after the rate decision.

GBP/USD Technical analysis

Technical lines from top to bottom:

With GBP/USD climbing sharply last week, we start at higher levels:

1.3710 has held in resistance since late April.

Next, 1.3615 capped the pair in late 2017. The round number of 1.35 is a pivotal line.

The round number of 1.34 is next.

Further down, 1.3315 was a swing high in late June.

1.3375 was a high point in July. It is followed by the round number of 1.3300 (mentioned last week). 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. The symbolic number of 1.3000 provided support to the pair in late September.

1.2910 has held in support since mid-February,

I am neutral on GBP/USD

The pound enjoyed a superb week, but will the rally continue? Investors are relieved that the no-deal scenario is unlikely to occur, as both London and Brussels want an orderly Brexit. The markets are optimistic that the sides will have to come to some accommodation. The British economy remains resilient, despite the uncertainties which remain over Brexit.