Gbpusd rises due to mixed economic data in UK and US

GBPUSD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	0.56%	71.1 Pips
Week to-date	0.62%	78.5 Pips
February	1.92%	238.7 Pips

Upcoming key events (London Time)

Fri 07:00 AM GBP Retail Sales Volumes (1-mth)

What happened lately

In the United Kingdom, economic data presents a mixed picture. The GfK Consumer Confidence showed improvement in February, increasing to -20 points from -22 in January. However, inflation-related metrics reveal contrasting trends. The Consumer Prices Index (CPI) for January decreased month-over-month to -0.1% from 0.3%, yet the 12-month CPI rose to 3% from December’s 2.5%. Similarly, the Core CPI Inflation Rate for the 12 months ending January increased to 3.7% from 3.2%. The Retail Price Index (12-month) experienced a slight uptick to 3.6% in January from 3.5% in December, despite a month-over-month decline. Producer Price Index (PPI) metrics showed optimism, with the Output (1-month) increase to 0.5%, following a negative December figure. Also on the rise was the PPI Core Output (1-month), advancing to 0.3% in January. However, the PPI Core Output on a 12-month basis took a minor dip to 1.5% from a revised 1.6% in December.

In the United States, economic indicators displayed signs of softness. Initial Unemployment Insurance Claims rose to 219,000 for the week ending 15 February, exceeding the prior week’s 213,000 claims. The U.S. Manufacturing Business Outlook suffered a notable decline in February, decreasing from 44.3 to 18.1 points, which indicates a significant slowdown in manufacturing optimism. Construction sectors saw only minor changes, with Building Permits slightly increasing to 1.483 million in January, while Housing Starts showed a more marked decline at 1.366 million compared to December’s 1.515 million.

Given these disparate economic signals between the U.K. and the U.S., the improvement in certain U.K. economic indicators such as consumer confidence and PPI outputs can bolster market sentiment toward the pound, providing support to the GBPUSD pair. With the slight uptick in the U.K. retail price metrics and manufacturing enthusiasm waning in the U.S., these factors likely contributed to the GBPUSD gaining 0.56% to 1.26627. Upcoming high-impact economic indicators, like U.K. Retail Sales volumes, could further influence this sentiment, potentially reinforcing the pound’s strength against the U.S. dollar, should the data confirm robust consumer spending within the U.K.

Latest from X (Twitter)

Tweets by Office for National Statistics

What can we expect from GBPUSD today?

GBPUSD on Thursday rose 0.56% to 1.26627. Price is above 9-Day EMA while Stochastic is falling in overbought zone.

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

Looking ahead for the day, immediate upside resistance level is R1 at 1.26964 with break above could target R2 at 1.27302 or figure level area. While towards the downside, we are looking at daily low of 1.25783 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.26711 may suggest continuation after recent positive movement.

For the week to-date, take note that GBPUSD is bullish as the pair continued to trade higher and is up by 0.62% over the past few days.

Key levels to watch out:

#GBPUSD Trending on Twitter

[custom-twitter-feeds hashtag=”#GBPUSD” num=3 showheader=false]