GBPUSD Analysis
| Week Ending 2025-02-07 | |||
| Open | High | Low | Close |
| 1.24 | 1.25 | 1.24 | 1.24 |
| Performance | |||||
| Period | Pct | Chg | Momentum | ||
| Friday | -0.32% | -39.2 Pips |  |
||
| Week 2025-02-07 | 0.86% | 106.3 Pips | |
||
| February | -0.21% | -25.6 Pips |  |
||
Upcoming key events for the new week (London Time)
Wed 01:30 PM CPI Inflation Rate (12-mth) Wed 01:30 PM CPI Inflation Rate excluding Food and Energy sectors (12-mth) Wed 03:00 PM Federal Reserve Chair Jerome Powell testifies
Thu 07:00 AM GDP (3-mth) Thu 01:30 PM PPI excluding Food and Energy sectors (12-mth) Fri 01:30 PM Monthly Retail Trade (1-mth)
What happened over the week
In the United States, the unemployment rate in January decreased to 4% from 4.1% in December, as reported by the Bureau of Labor Statistics. Average Hourly Earnings rose by 0.5% for January compared to 0.3% in December, and year-on-year earnings increased to 4.1% from 3.9%. However, Nonfarm Payroll Employment saw a decline to 143,000 from 256,000 in the previous month, pointing towards a slower employment growth. The U.S. U-6 unemployment figure remained unchanged at 7.5%. Unit labor costs increased significantly to 3% in Q4 from 0.8% in Q3, indicating rising costs for businesses. Additionally, there was a slight increase in Initial Unemployment Insurance Claims to 219,000 while labor productivity decreased to 1.2% in Q4. The JOLTS report indicated a decrease in job openings to 7.6 million from 8.156 million in November. Furthermore, new orders for manufactured goods continued to decline, falling by 0.9% in December.
In the United Kingdom, the Bank of England lowered its interest rate to 4.5% from the previous 4.75%, signaling a possible easing in monetary policy to support economic growth. The interest rate decision reflects the central bank’s response to potentially weakening economic conditions or inflationary pressures. This change in policy could affect borrowing costs and influence consumer spending and investment.
The GBPUSD exchange rate saw fluctuations, initially dropping to a two-week low but later climbing to a four-week high, ending the week at 1.23983, a 0.86% rise over the week. The developments in the U.S. labor market, such as the lower unemployment rate alongside decreased payroll numbers, suggest a mixed economic outlook, which might support the U.S. dollar, potentially leading to depreciation of GBPUSD unless balanced by UK economic data like the upcoming GDP figures. The decreased UK interest rates could exert downward pressure on the British pound, though upcoming high-impact economic events like the CPI and GDP announcements will be critical in shaping future currency movements. If U.S. recovery appears stronger, it could lead to further USD gains against GBP, whereas stronger UK data might counteract or reverse this trend.
From X (Twitter)
The Monetary Policy Committee voted by a majority of 7-2 to reduce #BankRate to 4.5%.
Find out more in our #MonetaryPolicyReport https://t.co/alETrQ281L pic.twitter.com/Vuo5G6m1H8
— Bank of England (@bankofengland) February 6, 2025
What can we expect from GBPUSD for the new week and what happened on Friday?
GBPUSD on Friday dropped -0.32% to 1.24. Price is below 9-Day EMA while Stochastic is falling. For the week ending 2025-02-07, the pair rose 0.86% or 106.3 pips higher.
Looking ahead, GBPUSD looks mixed as the pair is likely to consolidate above week low of 1.24.
For the new week, our technical outlook is mixed. To see upside interest, we prefer to look at price breakout of week high of 1.25 or at least consolidates above Weekly Pivot level of 1.24. 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 break above 1.25 would suggest bullish bias after recent positive movement.
For the month of February, GBPUSD is down by -0.21% or -25.6 pips lower.
Weekly key levels to watch out:
| R3 | 1.27 |
| R2 | 1.26 |
| R1 | 1.25 |
| Weekly Pivot | 1.24 |
| S1 | 1.23 |
| S2 | 1.23 |
| S3 | 1.21 |
You might also be interested in:
New Home Sales Source: Census Bureau
International trade in UK nations, regions and cities: 2022 Source: National Statistics Rental Vacancy Rate Source: Census Bureau Housing Vacancies and Homeownership Source: Census Bureau U.S. International Trade in Goods and Services, December and Annual 2024 Source: Bureau of Economic Analysis U.S. International Trade in Goods and Services Source: Census Bureau Manufacturers’ Shipments, Inventories, and Orders Source: Census Bureau Construction Spending Source: Census Bureau