GBPUSD on Friday rose 0.33% to 1.24215. Week ending 2025-01-03 moved lower by -1.25%. What happened.

GBPUSD Analysis

Performance
Period	Pct	Chg	Momentum
Friday	0.33%	41.3 Pips
Week 2025-01-03	-1.25%	-157.3 Pips
January	-1.02%	-127.6 Pips

Upcoming key events for the new week (London Time)

Wed 07:00 PM FOMC Meeting Minutes
Fri 01:30 PM Nonfarm Payroll Employment

What happened over the week

In the United States, economic data for the week ending December 28 revealed a decrease in initial unemployment insurance claims, dropping to 211,000 from a previous figure of 220,000, which was revised from 219,000, as reported by the Department of Labor. This indicates a strengthening labor market as fewer individuals have filed for unemployment benefits. Additionally, the U.S. House Price Index for October showed a deceleration in growth, decreasing to 0.4% from September’s 0.7%, according to the Federal Housing Finance Agency (FHFA). This decline in house price appreciation may suggest a cooling housing market, which could ease inflationary pressures in the sector.

The GBPUSD currency pair experienced a slight increase of 0.33% on Friday, closing at 1.24215. However, for the week ending January 3, it moved lower by 1.25%. Over December, the British pound experienced a 1.74% decline against the U.S. dollar, marking the third consecutive monthly decline and reaching the lowest level since April 2024. In 2024, the pound sterling ended 1.7% lower against the dollar. This trend indicates persistent downward pressure on the GBPUSD exchange rate. Upcoming events of significant importance include the FOMC Meeting Minutes and the Nonfarm Payroll Employment data releases, both of which are scheduled with high impact indicators and could influence the GBPUSD movement.

The recent economic data from the U.S. suggest that while the labor market remains robust, the housing market may be showing signs of cooling. The reduced unemployment claims reflect an improved employment situation, potentially increasing the attractiveness of the U.S. dollar as a stable investment. Conversely, declining house price growth could temper inflationary pressure, possibly influencing future Federal Reserve monetary policy decisions. For the GBPUSD exchange rate, mixed U.S. economic signals could enhance its volatility. If U.S. economic performance appears positive, it may strengthen the dollar further, exacerbating the pound’s current weakening trend. However, upcoming key economic releases like the FOMC minutes and Nonfarm Payroll figures will be crucial, as any indication of monetary easing or economic slowdown could weaken the dollar, offering potential support for the pound.

From X (Twitter)

Commenting on today’s revised GDP figures, ONS Director of Economic Statistics Liz McKeown said: (quote 1 of 2) 💬 pic.twitter.com/geOlwwjm3r

— Office for National Statistics (ONS) (@ONS) December 23, 2024

What can we expect from GBPUSD for the new week and what happened on Friday?

GBPUSD on Friday rose 0.33% to 1.24. Price is below 9-Day EMA while Stochastic is falling. For the week ending 2025-01-03, the pair dropped -1.25% or -157.3 pips lower.

Looking ahead, GBPUSD looks bullish as the pair ended higher after Friday trading session.

For the new week, our technical outlook is mixed. To see upside interest, we prefer to look at price breakout of week high of 1.26 or at least consolidates above Weekly Pivot level of 1.25. On the downside, we are looking at week low 1.24 or 1.23 (WS1) as immediate support level. GBPUSD need to break on either side to indicate a short-term bias. A close below week low of 1.24 would indicate selling pressure.

For the month of January, GBPUSD is down by -1.02% or -127.6 pips lower.

Weekly key levels to watch out:

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Construction Spending Source: Census Bureau