GBPUSD drops -0.76% to 1.33200 amid mixed U.S. housing data and upcoming high-impact events

GBPUSD Analysis

Performance after Wednesday
Period	Pct	Chg	Momentum
Wednesday	-0.76%	-101.6 Pips
Week to-date	0.04%	5.5 Pips
September	1.16%	153.3 Pips

Upcoming key events (London Time)

Thu 01:30 PM USD GDP annual rate
Thu 02:15 PM GBP Bank of England Monetary Policy Report Hearings
Thu 02:20 PM USD Federal Reserve Chair Jerome Powell speech
Fri 01:30 PM USD PCE Price Index, excluding food and energy (12-mth)

What happened lately

In the United States, the new-home sales reported for August declined by -4.7%, a notable shift from the 10.6% increase observed in July. This suggests a potential cooling in the housing market, possibly due to factors such as rising mortgage rates or broader economic uncertainties. Meanwhile, the U.S. House Price Index for July showed a modest increase of 0.1%, up from the -0.1% decline in June, indicating some stabilization in home prices. Source: Federal Housing Finance Agency (FHFA).

The depreciation of GBPUSD by -0.76% to 1.33200 on Wednesday underscores the volatility in the currency pair influenced by economic data and market sentiment. The decline in U.S. new-home sales might initially be perceived as a negative indicator for the U.S. economy, possibly exerting downward pressure on the USD. However, the slight improvement in the House Price Index suggests some resilience, which could temper any significant negative impact on the USD. Furthermore, upcoming high-impact events such as the U.S. GDP annual rate, Bank of England Monetary Policy Report Hearings, a speech by Federal Reserve Chair Jerome Powell, and the U.S. PCE Price Index release may inject additional volatility into the GBPUSD pair. The combination of these factors and economic indicators could lead traders to adopt a cautious stance, potentially resulting in short-term fluctuations in the currency pair’s value.

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What can we expect from GBPUSD today?

GBPUSD on Wednesday dropped -0.76% to 1.33200. Price is above 9-Day EMA while Stochastic is falling.

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

Looking ahead for the day, immediate support level is at S1 1.32781 with break below could see further selling pressure towards S2 at 1.32363. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 1.34296 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 1.33120 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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