Gbpusd rises slightly amid mixed economic indicators from US and UK

GBPUSD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	0.04%	5.6 Pips
Week to-date	0.15%	20 Pips
March	2.75%	346.1 Pips

Upcoming key events (London Time)

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 the United States, there is a diverse picture emerging from the recent economic indicators. February saw a 2% increase in pending home sales, recovering from a significant dip in January. This suggests a potential recovery in the housing sector. The quarterly U.S. GDP Price Index slightly decreased from 2.4% in Q3 to 2.3% in Q4, while the PCE excluding food and energy dropped to 2.6% from 2.7% over the same period, indicating modest inflationary pressures. The quarterly GDP rate slightly improved to 2.4%, hinting at a steadier economic growth. On the employment front, initial unemployment claims witnessed a minor decrease, reflecting stable labor conditions. However, durable goods orders presented mixed results with an overall decline of 0.9% in February, counteracting January’s revised growth of 3.2%. Particularly, nondefense capital goods orders excluding aircraft contracted by 0.3% in February, pointing to potential weaknesses in business investment.

In the United Kingdom, inflation indicators reflect a downward trend as both the Retail Price Index and Core CPI Inflation Rate decreased in February. The Retail Price Index for the 12-month period fell to 3.4% from 3.6% in January, while the Core CPI dropped to 3.5% from 3.7%. These reductions hint at easing consumer price pressures. Despite this, month-on-month readings show signs of inflationary pressures building, with the Retail Price Index and CPI both increasing on a monthly basis. While this could indicate a resurgence of consumer spending, it might also imply strengthening inflation resilience.

Regarding the GBPUSD currency pair, which inched up by 0.04% to 1.28800, the mix of U.S. and U.K. data will likely cause it to remain within a tight consolidation range. While U.S. durable goods data and modest inflation suggest a moderate outlook for the dollar, the U.K.’s easing inflation rates might weaken its currency. Furthermore, upcoming economic announcements like the U.K. GDP and retail sales along with the U.S. PCE Price Index could serve as catalysts for further movement. Investors are likely to adopt a cautious stance until these key events provide more direction, leaving the GBPUSD pair sensitive to further developments in both economies.

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What can we expect from GBPUSD today?

GBPUSD on Thursday rose 0.04% to 1.28800. 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 1.28717 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 1.28858 or trades above daily pivot 1.28787. Break above could target R1 at 1.28871. While to the downside, we are looking at 1.28717 (S1) and daily low of 1.28704 as support levels. GBPUSD need to break on either side to indicate a short-term bias. A break above 1.28858 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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