Gbp/usd drops as us economic indicators show mixed signals

GBPUSD Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	-0.38%	-52 Pips
Week to-date	-0.17%	-23.4 Pips
May	1.41%	187.5 Pips

Upcoming key events (London Time)

Wed 07:00 PM USD FOMC Meeting Minutes
Thu 01:30 PM USD GDP annual rate

What happened lately

In the United States, the economic scenario in March and April 2025 shows a mixed situation. The U.S. House Price Index experienced a minor decrease of 0.1% in March from February’s 0.1%, indicating a slight cooling in the housing market. This could reflect cautious consumer sentiment or pressures on household incomes. The durable goods orders data for April 2025 present a nuanced picture. While orders excluding transportation saw a modest increase of 0.2%, suggesting some sector resilience, overall new durable goods orders sharply declined by 6.3%, following a downward revision of March’s data. Nondefense capital goods orders excluding aircraft also dropped by 1.3%, compared to March’s revised 0.3%, highlighting reduced business investment. Additionally, durable goods orders excluding defense plunged by 7.5%, a significant downturn from March’s 10.5% revised figure, pointing toward broader manufacturing sector weaknesses.

The recent economic data may exert downward pressure on the GBPUSD pair. Weakness in U.S. economic indicators, particularly the substantial declines in various durable goods and capital orders, suggest potential vulnerability in U.S. economic growth. Despite this, GDP growth will be critical in the upcoming days to provide more context. The impending release of FOMC Meeting Minutes might offer insights into the Federal Reserve’s policy stance, which could influence market sentiment. If the minutes suggest a dovish stance due to subdued economic activity, the U.S. dollar may weaken, potentially reversing some of the recent losses against the GBP. On the contrary, if the indications are more hawkish, anticipating recovery benchmarks or inflation concerns, the GBPUSD pair may continue its current downward trajectory. Until more data is available, the pair may experience volatility as market participants try to gauge future economic direction.

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What can we expect from GBPUSD today?

GBPUSD on Tuesday dropped -0.38% to 1.35095. Price is above 9-Day EMA while Stochastic is falling.

Updated daily direction for GBPUSD looks bearish as the pair posted lower in Tuesday trading session.

Looking ahead for the day, immediate support level is at S1 1.34773 with break below could see further selling pressure towards S2 at 1.34451. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 1.35867 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 1.34998 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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