Gbpusd rises as UK shows economic contraction in April 2025

GBPUSD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	0.5%	67.1 Pips
Week to-date	0.71%	96 Pips
June	1.23%	165.7 Pips

Upcoming key events (London Time)

Fri 03:00 PM USD Index of Consumer Sentiment

What happened lately

In May 2025, the U.S. Producer Price Index (PPI) showed a modest increase of 0.1% following a 0.5% decline in April, as reported by the Bureau of Labor Statistics. The PPI excluding Food and Energy sectors also rose by 0.1%, improving from the previous revised figure of -0.2%. Year over year, the PPI slightly decreased to 2.6% from the previous revised figure of 2.5%. The 12-month PPI excluding Food and Energy declined to 3% from 3.2%. Meanwhile, Initial Unemployment Claims remained unchanged at 248K for the week ending 7 June. The U.S. Monthly Treasury Budget Statement fell into a deficit, decreasing to -$316 billion from $258 billion in April. Regarding consumer prices, the CPI inflation rate edged up slightly to 2.4% from 2.3% in April, while the month-over-month CPI excluding Food and Energy sectors dropped to 0.1% from 0.2%. The overall CPI inflation rate slightly dipped month over month to 0.1% from 0.2%.

In the United Kingdom, the economy showed signs of contraction in April 2025, as the GDP for the 1-month period decreased by 0.3% compared to a 0.2% increase in March, according to the Office for National Statistics. UK Manufacturing Production also fell, registering a decline of 0.9% from the previous month’s 0.8% drop. Conversely, there was a minor improvement in Industrial Production, which slightly increased to -0.6% from -0.7% in the previous month.

The recent economic data from the United States and the United Kingdom is likely to have a nuanced impact on the GBPUSD currency pair. While the U.S. inflation data indicates minor upward pressure, the stable unemployment claims may suggest a steady economic environment. Conversely, the UK economic data reflects a struggling economy with declining GDP and manufacturing figures. This divergence in economic performance could lead the GBPUSD to trend towards favoring the U.S. dollar over the British pound, given the stronger economic signals from the U.S. Despite a 0.5% rise in GBPUSD on Thursday to 1.36147, the upcoming USD events, especially the Index of Consumer Sentiment, may further influence market movements, potentially strengthening the USD if the sentiment is positive.

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What can we expect from GBPUSD today?

GBPUSD on Thursday rose 0.5% to 1.36147. Price is above 9-Day EMA while Stochastic is rising.

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

Looking ahead for the day, immediate upside resistance level is R1 at 1.36513 with break above could target R2 at 1.36878 or figure level area. While towards the downside, we are looking at daily low of 1.35224 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.36234 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 0.71% over the past few days.

Key levels to watch out:

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