GBPUSD Analysis
| Week Ending 2025-02-21 | |||
| Open | High | Low | Close |
| 1.26 | 1.27 | 1.26 | 1.26 |
| Performance | |||||
| Period | Pct | Chg | Momentum | ||
| Friday | -0.32% | -40.2 Pips |  |
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| Week 2025-02-21 | 0.37% | 46 Pips |  |
||
| February | 1.66% | 206.3 Pips |  |
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Upcoming key events for the new week (London Time)
Thu 01:30 PM GDP annual rate Fri 01:30 PM PCE Price Index, excluding food and energy (12-mth)
What happened over the week
In the United Kingdom, January witnessed a mixed economic performance. Retail sales volumes increased by 1.7% from December’s revised figure of -0.6%, suggesting a rebound in consumer activity despite the annual decrease to 1% compared to January of the previous year. Interestingly, retail sales volumes excluding fuel rose to 2.1% in January compared to December’s revised figure of -0.9%, indicating a slight improvement in consumer spending without the influence of fuel price volatility. Inflation data revealed a rise in the Consumer Prices Index (CPI) to 3% on a 12-month basis, up from 2.5% in December. The PPI Core Output annual rate decreased slightly to 1.5%. Additionally, employment indicators showed a significant increase in average earnings, both including and excluding bonuses, which rose to 6% and 5.9% respectively. The labor market remained stable with the ILO Unemployment Rate at 4.4%, and the GfK Consumer Confidence Index improving to -20 in February. Despite domestic improvements, the U.K. saw an increase in the Claimant Count Change to 22K in January.
The United States presented a mixed set of data in January and February 2025. The Index of Consumer Expectations grew to 3.5%, while the Index of Consumer Sentiment fell to 64.7 points, indicating diverging consumer outlooks. Initial Unemployment Insurance Claims increased to 219K, and the Manufacturing Business Outlook fell sharply from 44.3 to 18.1 points. Meanwhile, both Building Permits and Housing Starts had slight movement, with Building Permits marginally increasing to 1.483 million and Housing Starts decreasing to 1.366 million. The New York Empire State Manufacturing Index rebounded from -12.6 to 5.7 points, reflecting a recovery in manufacturing sentiment.
The effects of these mixed economic signals from both the U.K. and the U.S. will likely affect the GBPUSD currency pair. While the GBPUSD ended last week on a positive note, reaching a 9-week high, current economic data suggest some potential volatility. The positive economic indicators from the U.K., such as stronger employment statistics and consumer confidence, along with a rebound in retail sales, may support the pound. However, higher average earnings could increase inflationary pressures, potentially influencing future monetary policy. Meanwhile, U.S. data reflecting weaker consumer sentiment and increased unemployment claims may weigh on the dollar. Investors will likely watch the upcoming U.S. GDP annual rate and PCE Price Index data closely, which could further enhance volatility in GBPUSD. Overall, recent highs and data points suggest cautious optimism for the pound, but market participants should remain alert to upcoming economic revelations.
From X (Twitter)
Retail sales volumes were up by 1.7% in January 2025. following a fall of 0.6% in December 2024 (revised down from a fall of 0.3%).
Sales rebounded strongly following four months of consecutive falls driven by a robust month for food sales.
Read more ➡️ https://t.co/dMlTRVyG4o pic.twitter.com/0mCeQHrdqw
— Office for National Statistics (ONS) (@ONS) February 21, 2025
What can we expect from GBPUSD for the new week and what happened on Friday?
GBPUSD on Friday dropped -0.32% to 1.26. Price is above 9-Day EMA while Stochastic is falling. For the week ending 2025-02-21, the pair rose 0.37% or 46 pips higher.
Looking ahead, GBPUSD looks bearish as the pair posted lower in 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 1.27 or at least consolidates above Weekly Pivot level of 1.26. On the downside, we are looking at week low 1.26 or 1.26 (WS1) as immediate support level. GBPUSD need to break on either side to indicate a short-term bias. A break above 1.27 would suggest bullish bias after recent positive movement.
For the month of February, GBPUSD is up by 1.66% or 206.3 pips higher.
Weekly key levels to watch out:
| R3 | 1.28 |
| R2 | 1.27 |
| R1 | 1.27 |
| Weekly Pivot | 1.26 |
| S1 | 1.26 |
| S2 | 1.25 |
| S3 | 1.25 |
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Retail Sales, Great Britain: January 2025 time series Source: National Statistics Retail Sales, Great Britain: January 2025 Source: National Statistics
Minutes of the Federal Open Market Committee, January 28-29, 2025 Source: Federal Reserve New Residential Construction Source: Census Bureau Producer price inflation, UK: January 2025 Source: National Statistics Consumer price inflation, UK: January 2025 Source: National Statistics Producer price inflation, UK: January 2025 time series Source: National Statistics Consumer price inflation, UK: January 2025 time series Source: National Statistics Productivity flash estimate and overview, UK: October to December 2024 and July to September 2024 Source: National Statistics UK Labour Market February 2025 Source: National Statistics