Gbpusd rises 0.08% amid US housing market challenges and potential economic shifts

GBPUSD Analysis

Performance after Wednesday
Period	Pct	Chg	Momentum
Wednesday	0.08%	9.8 Pips
Week to-date	0.34%	43.3 Pips
February	2.28%	282.1 Pips

Upcoming key events (London Time)

Thu 01:30 PM USD GDP annual rate
Fri 01:30 PM USD PCE Price Index, excluding food and energy (12-mth)

What happened lately

In the United States, January’s New-Home Sales Change showed a significant decline, dropping to -10.5% from the revised figure of 8.1%, which was previously reported as 3.6%. This sharp decline reflects a challenging housing market as potential buyers may be discouraged by rising interest rates and economic uncertainties. Meanwhile, the US House Price Index for December indicated stability, remaining unchanged at 0.4% compared to November, as reported by the Federal Housing Finance Agency (FHFA). This suggests that housing prices have plateaued, possibly hinting at resistance from buyers to further price increases or an equilibrium between supply and demand.

The recent changes in the US housing market have potential implications for the GBPUSD currency pair. On Wednesday, the GBPUSD saw a slight increase of 0.08%, bringing it to 1.26743. The pair appears to be in a consolidation phase, indicating indecision among traders. The weakening figures in the US housing sector might lead to market speculation regarding potential shifts in US monetary policy or economic growth forecasts. Upcoming high-impact economic events, such as the USD GDP annual rate and the USD PCE Price Index, could further influence the GBPUSD rate. If these figures reflect strong economic performance, the USD may strengthen, putting downward pressure on GBPUSD. Conversely, any disappointing outcomes might weaken the USD, potentially causing the GBPUSD to rise. Traders will closely monitor these events, using them as a guiding signal for future positions in the currency market.

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What can we expect from GBPUSD today?

GBPUSD on Wednesday rose 0.08% to 1.26743. Price is above 9-Day EMA while Stochastic is rising.

Updated daily direction for GBPUSD looks mixed as the pair is likely to consolidate above 1.26343 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 1.27157 or trades above daily pivot 1.2675. Break above could target R1 at 1.2715. While to the downside, we are looking at 1.26343 (S1) and daily low of 1.26350 as support levels. GBPUSD need to break on either side to indicate a short-term bias. A break above 1.27157 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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