Gbp/usd rises amid mixed economic indicators from uk and us

GBPUSD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	0.55%	73.5 Pips
Week to-date	0.3%	40 Pips
April	3.23%	417.4 Pips

Upcoming key events (London Time)

Fri 07:00 AM GBP Retail Sales Volumes (1-mth)

What happened lately

In the United Kingdom, GfK Consumer Confidence for April dropped to -23 points from the previous month’s -19 points. This decline indicates a growing pessimism among consumers regarding their financial circumstances and the general economic situation. Such a negative sentiment may affect consumer spending, potentially slowing down economic growth. A fall in consumer confidence can have a long-lasting impact on economic activity, especially if it leads to reduced spending and investment.

In the United States, Initial Unemployment Insurance Claims for the week ending April 19 increased slightly to 222,000 from a revised figure of 216,000. This minor rise might be indicative of some softening in the labor market, although overall claims remain relatively low. Moreover, Nondefense Capital Goods Orders, excluding Aircraft, showed a modest increase to 0.1% in March from a revised -0.2% in February. This signals a slight improvement, albeit still indicating tentative business investment growth. U.S. Durable Goods Orders, on the other hand, showed robust growth in March, with new orders rising by 9.2% from February’s revised 1%. Notably, orders excluding Defense surged by 10.4%, suggesting strong demand for equipment and machinery. However, Durable Goods Orders excluding Transportation stagnated at 0%, down from February’s 0.7%, pointing towards uneven demand across sectors.

The U.S. housing market also showed strength with new-home sales increasing by 7.4% in March, a significant rise from 1.8% in February. This uptick reflects growing demand in the housing market, potentially spurred by favorable mortgage rates or improving consumer confidence in the economic outlook. Such strong economic indicators suggest resilience in the U.S. economy despite challenges, providing an upside risk to positive economic performance.

The recent economic data from the UK and the US is likely to affect the GBPUSD currency pair. The decline in UK consumer confidence may weigh on economic outlook and, by extension, the pound, as lower consumer confidence typically leads to reduced retail activity and economic growth. Conversely, stronger-than-expected U.S. economic data, especially in durable goods and housing market indicators, could bolster the US dollar. The balance of these elements may push GBPUSD lower, as the UK faces economic challenges and the U.S. demonstrates relative strength. However, upcoming events such as the UK’s Retail Sales Volumes data could influence this dynamic, depending on whether the figures surprise to the upside or downside.

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What can we expect from GBPUSD today?

GBPUSD on Thursday rose 0.55% to 1.33341. 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 1.32734 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 1.33490 or trades above daily pivot 1.33112. Break above could target R1 at 1.33719. While to the downside, we are looking at 1.32734 (S1) and daily low of 1.32505 as support levels. GBPUSD need to break on either side to indicate a short-term bias. A break above 1.33490 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 0.3% over the past few days.

Key levels to watch out:

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