Gbpusd sees slight rise amid mixed US economic signals and inflation stabilization

GBPUSD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	0.18%	24.2 Pips
Week to-date	-0.28%	-38.4 Pips
May	1.29%	172.5 Pips

Upcoming key events (London Time)

Fri 01:30 PM USD PCE Price Index, excluding food and energy (12-mth)

What happened lately

The U.S. economic data presented reveals a mixed picture of the country’s economic health. The decrease in pending home sales by 6.3% in April highlights a cooling housing market compared to the revised figure of 6.1% growth in March. This contraction could signal reduced consumer confidence or tighter lending conditions. Additionally, the rise in initial unemployment claims to 240,000 for the week ending May 24 represents an increase in joblessness, indicating potential softening in the labor market. However, the FLASH estimate of the U.S. GDP annual rate showed a slight improvement, with a contraction of 0.2% in Q1 2025 compared to -0.3% in Q4 2024. This suggests that the U.S. economy is contracting at a slower pace.

In terms of inflation measures, the PCE excluding food and energy prices dropped marginally to 3.4% from 3.5%, signaling a slight easing of core inflation pressures. Meanwhile, the GDP Price Index remained unchanged at 3.7%, with general price stability observed. Similarly, the overall PCE Price rose by 3.6%, remaining steady from the previous quarter. This data suggests that inflation pressures are persistent but not worsening, which aligns with a stabilizing economy.

Regarding the GBPUSD currency pair, the movements on Thursday where the pair rose by 0.18% to 1.34902, indicate a phase of consolidation. The data from the U.S. could introduce volatility to this pair. The negative economic signals such as increased unemployment claims and declining home sales may weigh on the dollar, potentially leading to a stronger pound if the British economic indicators remain robust or show improvement. However, attention should also be given to the PCE Price Index data set to be released, excluding food and energy, as it represents a crucial data point for assessing inflationary pressures.

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What can we expect from GBPUSD today?

GBPUSD on Thursday rose 0.18% to 1.34902. 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 1.34343 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 1.35072 or trades above daily pivot 1.34707. Break above could target R1 at 1.35267. While to the downside, we are looking at 1.34343 (S1) and daily low of 1.34148 as support levels. GBPUSD need to break on either side to indicate a short-term bias. A break above 1.35072 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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