Gbp/usd experiences slight dip amid consolidation as markets await economic signals

GBPUSD Analysis

Performance after Wednesday
Period	Pct	Chg	Momentum
Wednesday	-0.02%	-2 Pips
Week to-date	0.25%	32 Pips
March	2.93%	368.6 Pips

Upcoming key events (London Time)

Thu 12:30 PM USD GDP annual rate
Fri 07:00 AM GBP GDP (3-mth)
Fri 07:00 AM GBP Retail Sales Volumes (1-mth)
Fri 12:30 PM USD PCE Price Index, excluding food and energy (12-mth)

What happened lately

In February, the U.S. experienced a notable decline in durable goods orders with a 0.9% decrease, after a significant revised increase of 3.2% in January. Nondefense capital goods orders, excluding aircraft, declined 0.3% from January’s growth of 0.9%. Similarly, durable goods orders, excluding defense, fell by 0.8% after an increase of 3.7% in January. However, durable goods orders, excluding transportation, showed resilience with a 0.7% rise, contrasting with the stagnation in January. Furthermore, new-home sales rebounded by 1.8% in February from a significant drop of 6.9% in January, and the U.S. House Price Index saw a slight decrease to 0.2% from 0.5% in January.

In the United Kingdom, the Retail Price Index reported a 12-month decrease to 3.4% from 3.6% in January. The Core CPI Inflation Rate similarly fell to 3.5% from 3.7%. Nonetheless, the monthly Retail Price Index increased to 0.6% from a negative 0.1% in January. The Consumer Prices Index (CPI) decreased to 2.8% in February from January’s 3%, though the month-on-month CPI reflected a positive move to 0.4% from -0.1%. This indicates a seeming softening of inflationary pressures, albeit with some evidence of monthly price recovery.

The GBPUSD currency pair showed minimal movement, decreasing by 0.02% to 1.29430, reflecting market consolidation. This trend indicates a currency market waiting for definitive economic signals. The upcoming release of high-impact events like the U.S. GDP annual rate, U.K. GDP (3-month), and U.K. Retail Sales will provide fresh data points with significant potential to influence the pair’s value. The outlook for the GBPUSD will also be impacted by the U.S. PCE Price Index data, which could offer insight into inflationary trends. Overall, a softening U.K. inflation picture juxtaposed with mixed U.S. durable goods and housing data could stabilize the currency pair in the short term, though traders remain poised for potentially more volatile movements depending on the magnitude and direction of the forthcoming data points.

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What can we expect from GBPUSD today?

GBPUSD on Wednesday dropped -0.02% to 1.29430. 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 1.29389 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 1.29490 or trades above daily pivot 1.29439. Break above could target R1 at 1.29481. While to the downside, we are looking at 1.29389 (S1) and daily low of 1.29398 as support levels. GBPUSD need to break on either side to indicate a short-term bias. A close below 1.29398 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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