GBP/USD recorded strong gains for a second straight week. The pair rose 0.79%, closing the week just shy of the 1.41 level. The upcoming week has six releases, including GDP. Here is an outlook for the highlights and an updated technical analysis for GBP/USD (FXB).

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In the UK, GDP for Q1 slipped by 1.5%, close to the estimate of -1.6%. However, the March GDP report was positive, with a healthy gain of 2.1%, above the consensus of 1.5%. Manufacturing Production rose 2.1% in March, an 8-month high and above the forecast of 1.0%.

In the US, April inflation was much stronger than expected. Headline CPI (YoY) climbed 4.2%, up from 2.6% beforehand. PPI also climbed sharply, with a gain of 6.2%, up from 4.2% beforehand. Despite the surge in inflation, Fed members reiterated that there are no plans to taper the massive stimulus program.

Retail Sales for March (MoM) disappointed. The headline reading slowed to 0.0%, down from 9.8% in the previous release and shy of the estimate of 1.0%. Core Retail Sales contracted by 0.8%, down sharply from 8.4% and shy of the forecast of +0.5%.

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

1. Employment Report: Tuesday, 6:00. UK employment numbers are not expected to show must change from the previous release. Wage growth and the unemployment rate are expected to remain unchanged at 4.5% and 4.9%, respectively. The number of unemployed persons is forecast to rise to 25.6 thousand, up from 10.1 thousand. 
2. Inflation Report: Wednesday, 6:00. Inflation has surged in the US, and the April data could point to a similar story in the UK. Headline CPI is expected to climb from 0.7% to 1.4%, while core CPI is projected to rise to 1.3%, up from 1.1%.
3. CBI Industrial Order Expectations: Thursday, 10:00. Sales volume expectations have been mired in negative territory for over two years, but the May estimate stands at zero, up from the April read of -8 points.
4. Retail Sales: Friday, 6:00. March retail sales sparkled, with a gain of 5.4%. April is also expected to be a strong month, with an estimate of 4.5%.
5. Manufacturing PMI: Friday, 8:30. Manufacturing continues to show strong growth, with readings well above the 50 level, which separates contraction from expansion. The estimate for April stands at 60. 7, after a March reading of 60.9 (revised upwards from 60.7).
6. Services PMI: Friday, 8:30. Business activity has accelerated markedly as the UK continues to reopen the economy. The PMI rose to 61.0 in March (revised from 60.1) and the estimate for April stands at 62.2 points.

Technical lines from top to bottom:

With the pound continuing to rise, we start at higher levels:

1.4333 has provided resistance since April 2018.

1.4269 is next.

1.4137 was tested during the week. It is a weak line.

1.4070 (mentioned last week) is protecting the symbolic 1.40 level.

1.3956 is next.

1.3859 is the final support level for now..

I remain bullish on GDP/USD

The pound is up 2.0% in the month of May, and with the government easing health restrictions, the UK economy will continue to expand. This bodes well for the British pound.