Gbpusd rises as us manufacturing index drops, uk economic events eyed

GBPUSD Analysis

Performance after Monday
Period	Pct	Chg	Momentum
Monday	0.37%	46.6 Pips
Week to-date	0.34%	43.1 Pips
December	-0.14%	-17.4 Pips

Upcoming key events (London Time)

Tue 07:00 AM GBP Claimant Count Change
Tue 07:00 AM GBP Labour Force Survey Employment Change
Tue 01:30 PM USD Monthly Retail Trade (1-mth)
Wed 07:00 AM GBP Consumer Prices Index (CPI) (12-mth)
Wed 07:00 PM USD Fed Interest Rate Decision (Federal Funds Rate)
Wed 07:00 PM USD Interest Rate Projections

What happened lately

In the United States, the New York Empire State Manufacturing Index experienced a significant decline in December, dropping to 0.2 points from a robust 31.2 points recorded in November. This sharp decrease suggests a slowdown in manufacturing activity within the New York area, reflecting potential challenges in the broader industrial sector. The index, reported by the New York Fed, serves as a vital economic indicator reflecting business conditions for manufacturers, and this dip could imply a weakening demand or supply chain disruptions affecting the region’s economic health.

In the United Kingdom, several crucial economic events are on the horizon that could influence market sentiment. Key reports such as the GBP Claimant Count Change and the Labour Force Survey Employment Change are set to be released, providing insights into employment dynamics within the UK economy. Furthermore, the Consumer Prices Index (CPI), a measure of inflation, will be closely watched as it could affect monetary policy decisions by the Bank of England. These data releases, scheduled to occur over the upcoming days, hold substantial weight in forecasting the country’s economic trajectory and could lead to volatility in the currency markets.

The GBPUSD currency pair observed a rise of 0.37% to the level of 1.26786. The movement in the pair can be influenced by various economic data and upcoming events in both the US and UK. The significant drop in the US New York Empire State Manufacturing Index may have contributed to Dollar weakness, supporting a move higher in GBPUSD. On top of this, market participants are likely to be positioning ahead of key events, including the anticipated US Fed Interest Rate Decision and the UK’s CPI release. A higher-than-expected UK CPI could bolster the Pound, pushing GBPUSD higher, while any hawkish tone or interest rate hike from the US Federal Reserve could provide support to the Dollar, potentially capping gains in GBPUSD. Traders will be closely monitoring these developments as they may guide near-term movements in the currency pair.

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What can we expect from GBPUSD today?

GBPUSD on Monday rose 0.37% to 1.26786. Price is below 9-Day EMA while Stochastic is falling.

Updated daily direction for GBPUSD looks bullish as the pair ended higher after Monday trading session.

Looking ahead for the day, immediate upside resistance level is R1 at 1.27097 with break above could target R2 at 1.27408 or figure level area. While towards the downside, we are looking at daily low of 1.26253 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.26986 may suggest continuation after recent positive movement.

For the week to-date, take note that GBPUSD is mixed as compared to the prior week.

Key levels to watch out:

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