Forex - GBP/USD weekly outlook: July 11 - 15

Investing.com – Last week saw the pound close trading unchanged against the U.S. dollar, after rebounding from an almost five-month low on Friday, following U.S. data showing that non-farm payrolls rose significantly less-than-expected in June.

GBP/USD hit 1.5929 on Friday, the pair’s lowest since June 28; the pair subsequently consolidated at 1.6058 by close of trade on Friday, unchanged on the week.

Cable is likely to find support at 1.5910, the low of June 28 and a five-month low and resistance at 1.6139, the high of July 4 and a two-week high.

The Department of Labor said U.S. nonfarm payrolls rose by just 18,000 in June, far below the 89,000 increase forecast by economists, with employers hiring the fewest workers in nine months, while the unemployment rate unexpectedly rose 0.1% to 9.2%, the highest level this year.

The pound came under heavy selling pressure earlier in the week, on the view that the Bank of England is committed to loose monetary policy and looks unlikely to raise interest rates before next summer.

The BoE kept rates unchanged at a record low of 0.5% on Thursday, in a widely expected decision.

Earlier in the week, the pound was boosted after a report showing that British manufacturing output rose at its fastest pace in over a year in May, after a sharp drop the previous month. However, the upbeat data did little to alter expectations for a near-term rate hike by the BoE.

In the week ahead, investors will be looking towards official data on retail sales and consumer prices to gauge the strength of the U.S. economic recovery, while the U.K. is to publish official data on consumer prices and employment.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday, as there are no relevant events on this day.

Tuesday, July 12

The U.K. is to release industry data on retail sales and house prices, important indicators of economic health. Later in the day, the U.K. is to publish official data on consumer price inflation, which accounts for a majority of overall inflation, as well as a report on the country’s trade balance, the difference in value between imported and exported goods and services over the month.

The U.S. is to publish official data on the trade balance, the difference in value between imported and exported goods and services over the month.

In addition, the Federal Reserve is to publish the minutes of the June policy-setting meeting. The minutes give investors a detailed insight into the economic and financial conditions that influenced the interest rate decision.

Wednesday, July 13

The U.K. is to produce official data on claimant count change, a leading indicator of economic health, as well as data on average earnings and the unemployment rate.

Later in the day, the U.S. is to publish official data on import prices and crude oil inventories, as well as a report on the federal budget balance. In addition, Federal Reserve Chairman Ben Bernanke is to give testimony on monetary policy before lawmakers in Washington.

Thursday, July 14

The U.S. is to release a string of economic data, beginning with a report on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity.

The country is also to release official data on producer price inflation, a leading indicator of consumer inflation, as well as weekly government data on initial jobless claims. Also Thursday, Fed Chair Ben Bernanke is to deliver the second part of his testimony on monetary policy in Washington.

Friday, July 15

The U.S. is to round up the week with a flurry of economic data, with reports on consumer price inflation, which accounts for a majority of overall inflation. In addition, the U.S. is to publish a report on manufacturing activity in New York state, as well as government data on industrial production and the capacity utilization rate. Meanwhile, the University of Michigan is to publish preliminary data on consumer sentiment and inflation expectations.