GBP/USD was relatively stable as Theresa May stabilized her government. Nevertheless, the EU Summit and political support remain uncertain. The upcoming week also features a few additional releases of interest. Here are the key events and an updated technical analysis for GBP/USD.

The rebellion against Theresa May faltered as fewer than 48 MP’s sent letters calling for a leadership challenge. On the other hand, it remains unclear if she will have enough support for the Brexit deal in parliament after the EU Summit. And even the EU Summit may not prove to be a rubber-stamp event. Spain raised objections regarding the status of Gibraltar and the UK may still try to negotiate some parts of the withdrawal deal or the accompanying political declaration. BOE Governor Mark Carney and his colleagues testified and conveyed a message that they expect a smooth Brexit transition in their forecasts.

Updates:

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

1. EU Summit on Brexit: Sunday-Monday. The UK and the EU reached a detailed agreement on the UK’s divorce from the EU. This will likely be signed off by all countries. Uncertainty remains about the political declaration about the future relationship. The sides will be negotiating various topics such as the status of Gibraltar which has infuriated Spain. UK PM Theresa May will try to achieve some small wins in the event in order to muster more support for the deal when it goes to parliament early in December. Headlines from the EU Summit will set the tone for the opening of the new week, mostly moving the Pound but also the Euro and other currencies. Reactions from Brexiteers in Britain also matter quite a bit.
2. High Street Lending: Monday, 8:30. The figure represents around 60% of all UK mortgages and is released before the official numbers are. Back in September, mortgage approvals slipped to 38.5K, slightly below expectations. A similar number is likely now: 38.9K.
3. CBI Realized Sales: Tuesday, 11:00. The Confederation of British Industry’s gauge of sales dropped sharply in October to 5 points, down from 23 beforehand. However, it remains positive, indicating a higher sales volume. A rise to 10 points is expected.
4. BRC Shop Price Index: Wednesday, 00:01. The British Retail Consortium’s inflation gauge showed an annual drop of 0.2% in prices in its stores in September. The data for October is due now.
5. BOE Financial Stability Report: Wednesday. The Bank of England publishes its thorough report on financial stability twice a year. Apart from the details on banks, the BOE also makes available some economic assessments which are relevant to monetary policy.
6. Net Lending to Individuals: Thursday, 9:30. Growth in net lending implies enhanced economic activity. The figure stood at 4.7 billion in September, better than had been expected. The data for October is released now and may show a squeeze: Expectations stand at 4.5 billion.
7. M4 Money Supply: Thursday, 9:30. The amount of money in circulation disappointed in the past two months, squeezing by 0.3% in September. The downgrade implies falling economic activity. October may see a rise. An increase of 0.3% is on the cards.
8. Mortgage Approvals: Thursday, 9:30. The BOE\s comprehensive report on lending was quite stable in recent months, standing at 65K in September. It is published after the High Street Lending number, reducing its shine. The same figure of 65K is projected.
9. GfK Consumer Confidence: Friday, 00:01. This survey of around 2,000 consumers fell to the bottom of the range in October: -10 points, indicating pessimism among shoppers. A score of -11 is projected.

* All times are GMT

GBP/USD Technical analysis

Pound/dollar had a choppy week, but found support around 1.2790, mentioned last week.

Technical lines from top to bottom:

1.3375 was a high point in July. It is followed by 1.3300 was the high point in September and also a psychologically important round number.

1.3255 was the high point in mid-October, ahead of the EU Summit on Brexit. 1.3170 was a swing high in early November.

1.3070 was a high point in mid-November. The round number of 1.3000 is important after providing support to the pair in late September. 1.2910 was a high point in late November.

Further down, 1.2790 served as support late August and also beforehand. 1.2750 was the low point in mid-November. 1.2700 was the low point in late October.

The current 2018 trough at 1.2660 is the next level. 1.2590 was a swing low in September 2017.

Even lower, 1.25 is a round number and also worked as support in early 2017.

I am bullish on GBP/USD

It is in everyone’s interest to reach a Brexit deal and provide some certainty to markets which are not fully pricing in an accord. A successful EU Summit and growing support in parliament could push the pair higher.