Forex - GBP/USD weekly outlook: June 10 - 14

The pound was lower against the dollar on Friday after U.S. employment data for May showed that the economy added slightly more jobs than expected.

GBP/USD fell to session lows of 1.5489 on Friday, before trimming losses to settle at 1.5551, 0.33% lower for the day, but up 1.48% for the week.

Cable is likely to find support at 1.5380, Thursday’s low and resistance at 1.5682, Thursday’s high and an almost four-month high.

The Department of Labor said the U.S. economy added 175,000 jobs last month, slightly more than the 170,000 gain forecast by economists. The unemployment rate ticked up to 7.6% from 7.5% in April.

The data reassured investors that the U.S. economic recovery is continuing, but not strongly enough for the Federal Reserve to begin tapering off its USD85 billion-a-month asset purchase program.

The dollar fell sharply against sterling and the other major currencies on Thursday, after weaker-than-expected private sector jobs data lowered expectations for a strong economic recovery.

Payroll processor ADP said non-farm private employment rose by a seasonally adjusted 135,000 last month, below expectations for an increase of 165,000. 

The Bank of England left interest rates on hold at a record low 0.5% and kept the size of its asset purchase program unchanged at GBP375 billion on Thursday at outgoing Governor Mervyn King’s final meeting.

The decision came after data on Wednesday showed that service sector activity in the U.K. expanded at the fastest rate since March 2012 last month.

Elsewhere, sterling was slightly lower against the euro on Friday, withEUR/GBP rising 0.14% to 0.8502 at the close. The euro was boosted after official data showed that German industrial production rose 1.8% in May, the largest increase in almost a year.

In the week ahead, investors will be focusing on U.S. data on retail sales and consumer sentiment for indications of the strength of the economic recovery. The U.K. is to release official data on 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, June 11

The U.K. is to release official data on manufacturing production, a leading indicator of economic health.

Wednesday, June 12

The U.K. is to release government data on the change in the number of people unemployed and the unemployment rate.

Thursday, June 13

The U.S. is to release official data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity, as well as the weekly government report on initial jobless claims.

Friday, June 14

The U.S. is to round up the week with data on producer price inflation, industrial production, the capacity utilization rate, the current account and preliminary data from the University of Michigan on consumer sentiment.