Gbp rises to 1.32222 as US and UK economic indicators diverge

GBPUSD Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	0.3%	39.8 Pips
Week to-date	1.09%	143 Pips
April	2.41%	311.4 Pips

Upcoming key events (London Time)

Wed 07:00 AM GBP Consumer Prices Index (CPI) (12-mth)
Wed 01:30 PM USD Monthly Retail Trade (1-mth)

What happened lately

In the United States, the New York Empire State Manufacturing Index showed improvement in April, rising to -8.1 points from a previous -20 points in March. This positive shift suggests a less severe contraction in the manufacturing sector than anticipated, which could signal a stabilizing economic environment in the region.

Meanwhile, in the United Kingdom, the labor market data present a mixed picture. The Claimant Count Rate remained steady at 4.7% in March, mirroring February’s figures, while the Claimant Count Change saw a significant decrease to 18.7K from 44.2K in February, indicating a reduction in unemployment claims. The ILO Unemployment Rate stayed constant at 4.4% for the period ending in February. In terms of wage growth, Average Earnings including Bonus remained at 5.6%, and those excluding Bonus saw a slight rise to 5.9% from the previously revised figure of 5.8%. The Labour Force Survey noted a positive Employment Change with an increase to 206K from 144K in January, suggesting improvements in employment levels.

Retail data from the U.K. showed no change, with BRC Like-For-Like Retail Sales holding steady at 0.9% both for the month of March and in a 12-month comparison, indicating stable consumer spending patterns without any significant growth or decline.

The 0.3% rise in GBPUSD to 1.32222 on Tuesday illustrates a strengthening of the pound relative to the dollar, likely influenced by the decrease in U.K. unemployment claims and employment gains. However, with the U.K.’s Consumer Prices Index (CPI) for the year and the U.S. Monthly Retail Trade data expected on Wednesday, the pair’s dynamic could see further fluctuations. If U.K. CPI reveals rising inflation rates, it could bolster the pound, while strong U.S. retail data might boost the dollar, intensifying the exchange rate volatility. Overall, the stability in the U.K. labor market and subdued retail sales, balanced against improved U.S. industrial activity, sets a complex backdrop for future movements in GBPUSD.

Latest from X (Twitter)

Tweets by Office for National Statistics

What can we expect from GBPUSD today?

GBPUSD on Tuesday rose 0.3% to 1.32222. Price is above 9-Day EMA while Stochastic is rising in overbought zone.

Updated daily direction for GBPUSD looks bullish as the pair ended higher after Tuesday trading session.

Looking ahead for the day, immediate upside resistance level is R1 at 1.32615 with break above could target R2 at 1.33008 or figure level area. While towards the downside, we are looking at daily low of 1.31637 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.32519 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 1.09% over the past few days.

Key levels to watch out:

#GBPUSD Trending on Twitter

[custom-twitter-feeds hashtag=”#GBPUSD” num=3 showheader=false]