Gbpusd rises as US and UK economic data presents a mixed picture

GBPUSD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	0.16%	21.4 Pips
Week to-date	1.35%	176 Pips
April	2.67%	345.4 Pips

Upcoming key events (London Time)

No major events for the day.

What happened lately

In the United States, the latest economic data presents a mixed picture of the country’s economic health. For the week ending April 12, initial unemployment claims showed a decline to 215,000, pointing to a robust job market. Building permits saw an increase in March, rising to 1.482 million, suggesting a potential future uptick in construction activity. Conversely, housing starts fell significantly to 1.324 million, indicating current challenges in the housing market. The Manufacturing Business Outlook witnessed a sharp decline, showing a negative sentiment in the manufacturing sector. Retail Trade presented mixed results with the overall figure seeing a strong increase to 1.4% in March, while trade excluding automobiles saw a slight decline, and the control group decreased. This array of data highlights stability in employment, but challenges across housing and manufacturing sectors.

In the United Kingdom, recent data reflects a slowdown in inflationary pressures. The Retail Price Index for March saw a decrease, both on a monthly and annual basis, signaling a reduced pace of price increases. Similarly, the Core CPI Inflation Rate fell to 3.4% from 3.5% over the 12 months to March. The Consumer Prices Index (CPI) also saw declines in both its monthly and yearly results, dropping to 0.3% month-over-month, and to 2.6% year-over-year. These figures suggest surging inflation may be moderating, offering some relief to consumers, yet also possibly indicating diminishing demand pressures within the economy.

Given the current exchange rate dynamics, the GBPUSD currency pair has risen slightly, closing at 1.32629. The mixed economic signals from the U.S. might create some level of support for the GBP against the USD due to potential concerns over U.S. manufacturing and housing challenges. Meanwhile, slower inflation in the UK could initially decrease the GBP’s appeal for rate hikes, yet simultaneously stabilize purchasing power. As the pair remains in consolidation with no major events impacting the currency directly, the future direction may largely depend on forthcoming data releases or shifts in market sentiment. The current economic backdrop may result in muted volatility for this currency pair until clearer trends in economic performance or policy emerge.

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What can we expect from GBPUSD today?

GBPUSD on Thursday rose 0.16% to 1.32629. Price is above 9-Day EMA while Stochastic is falling in overbought zone.

Updated daily direction for GBPUSD looks mixed as the pair is likely to consolidate above 1.3219 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 1.32731 or trades above daily pivot 1.3246. Break above could target R1 at 1.329. While to the downside, we are looking at 1.3219 (S1) and daily low of 1.32021 as support levels. GBPUSD need to break on either side to indicate a short-term bias. A break above 1.32731 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 1.35% over the past few days.

Key levels to watch out:

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