GBPUSD sees slight rise amid mixed economic signals in UK and US

GBPUSD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	0.05%	6 Pips
Week to-date	0.6%	77 Pips
March	3.46%	434.6 Pips

Upcoming key events (London Time)

No major events for the day.

What happened lately

In the United Kingdom, recent data reveals mixed signals for the economy. GfK Consumer Confidence showed a slight improvement in March, moving from -20 to -19 points. The Bank of England kept its interest rate unchanged at 4.5%, suggesting a stable monetary policy environment. However, the labor market displayed some volatility; the Claimant Count Rate rose to 4.7% in February from 4.6% in January, and the Claimant Count Change increased significantly to 44.2K from 22K. In contrast, employment showed positive momentum with the Labour Force Survey Employment Change increasing to 144K in January from 107K in December. On the earnings front, Average Earnings including Bonus decreased slightly to 5.8% for the three months to January, and excluding bonuses, earnings maintained a steady pace at 5.9%. The ILO Unemployment Rate remained stable at 4.4% in January.

In the United States, there is a noticeable rise in Initial Unemployment Insurance Claims which increased to 223K in mid-March. The Philadelphia Fed’s Manufacturing Business Outlook Survey reflected slowing economic momentum, dropping from 18.1 points in February to 12.5. Despite this, the Federal Reserve has maintained its Federal Funds Rate at 4.5%, aligning with their interest rate projections which suggest a decrease over the next three years. The projections for the first year have been lowered significantly to 3.4% from 3.9%, the second year to 3.1% from 3.4%, and the longer-run rate remains at 3%. This indicates a potential shift towards more dovish policy in the near future.

The impact on the GBPUSD exchange rate seems to be one of consolidation, as the pair saw a minor increase of 0.05% to 1.30090. The relatively unchanged monetary stance in both countries, paired with mixed economic data, suggests that traders may be anticipating future shifts based on incoming data. The downward revision of U.S. interest rate projections could potentially offer support to the GBP if the market perceives a less aggressive Fed stance. Without significant upcoming events, the market could remain in a range-bound phase, with traders closely observing any new economic indicators for hints on future policy direction.

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What can we expect from GBPUSD today?

GBPUSD on Thursday rose 0.05% to 1.30090. Price is above 9-Day EMA while Stochastic is rising in overbought zone.

Updated daily direction for GBPUSD looks mixed as the pair is likely to consolidate above 1.30015 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 1.30145 or trades above daily pivot 1.3008. Break above could target R1 at 1.30155. While to the downside, we are looking at 1.30015 (S1) and daily low of 1.30005 as support levels. GBPUSD need to break on either side to indicate a short-term bias. A break above 1.30145 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 0.6% over the past few days.

Key levels to watch out:

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