Gbpusd drops slightly amid consolidation as traders eye key economic indicators

GBPUSD Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	-0.01%	-1.8 Pips
Week to-date	0.17%	22 Pips
March	2.76%	347.7 Pips

Upcoming key events (London Time)

Wed 07:00 AM GBP Consumer Prices Index (CPI) (12-mth)
Thu 12:30 PM USD GDP annual rate

What happened lately

In the United States, new-home sales saw a positive shift in February with a 1.8% increase, a notable recovery from the previous month’s steep decline of -6.9%, which itself was a revision from an even more pessimistic initial report of -10.5%. This upward movement suggests some resilience in the housing market amidst broader economic uncertainties. At the same time, the U.S. House Price Index cooled slightly, decreasing to 0.2% in January from December’s revised figure of 0.5%. This suggests that while the demand for new homes might be stabilizing or even recovering, price growth in the housing sector is modest, potentially reflecting broader concerns about affordability and financial conditions.

In the UK, traders are keenly observing the release of the Consumer Prices Index (CPI), which is a high-impact event scheduled for Wednesday morning. The CPI is anticipated to provide vital insights into the inflationary trend within the country, which could heavily influence Bank of England’s monetary policy decisions. A higher-than-expected CPI could lead to speculation about increased interest rates, thereby potentially strengthening the British Pound.

The effect on the GBPUSD pair is likely to be determined by these upcoming key economic events. Despite a minor drop of -0.01% to 1.29190, the pair is currently in a consolidation phase. With the high-impact UK CPI release and the U.S. GDP annual rate announcement on Thursday, volatility is expected. A higher UK CPI could bolster the GBP, pushing the GBPUSD upward. Conversely, if the U.S. GDP shows robust growth, it might strengthen the USD, exerting downward pressure on the currency pair. Ultimately, traders will be looking at these economic indicators to determine the future direction of GBPUSD.

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What can we expect from GBPUSD today?

GBPUSD on Tuesday dropped -0.01% to 1.29190. Price is above 9-Day EMA while Stochastic is falling.

Updated daily direction for GBPUSD looks mixed as the pair is likely to consolidate above 1.29154 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 1.29239 or trades above daily pivot 1.29197. Break above could target R1 at 1.29232. While to the downside, we are looking at 1.29154 (S1) and daily low of 1.29161 as support levels. GBPUSD need to break on either side to indicate a short-term bias. A close below 1.29161 would indicate selling pressure.

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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