GBPUSD rises by 0.64% amid mixed economic signals from the US

GBPUSD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	0.64%	84.8 Pips
Week to-date	0.73%	96.8 Pips
September	1.86%	244.6 Pips

Upcoming key events (London Time)

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

What happened lately

In the United States, the Gross Domestic Product (GDP) saw a significant increase at an annual rate of 3.0% in Q2 2024, as reported by the U.S. Bureau of Economic Analysis. This exceeds market expectations and indicates robust economic growth. Additionally, pending home sales rebounded in August, showing a monthly rise of 0.6% compared to a steep decline of -5.5% in July. Durable goods orders excluding transportation also picked up, registering a 0.5% increase in August following a revised -0.2% in July, revealing a positive trend in industrial activity.

However, certain data points present a mixed picture. For instance, new orders for durable goods in August remained stagnant at 0%, a stark contrast to a revised 9.9% gain in July, as per the Census Bureau. Moreover, durable goods orders excluding defense dropped to -0.2% from a significant 10.3% in July. Nondefense capital goods orders except aircraft saw a modest improvement, rising by 0.2% in August compared to a -0.1% decline in July.

On the employment front, U.S. initial unemployment insurance claims fell slightly to 218,000 in the week ending 21 September, down from 219,000 the previous week, according to the Department of Labor. Contrary to this favorable employment data, new-home sales in August plummeted by -4.7% after a sharp 10.6% rise in July, suggesting potential challenges in the housing market.

The effect of this economic data on the GBPUSD, which rose by 0.64% to 1.34110 on Thursday, indicates a complex interplay between currency strengths. The stronger-than-expected U.S. GDP growth and the modest upticks in certain economic indicators like durable goods orders excluding transportation and decreased initial unemployment claims generally support a stronger USD. However, negative trends in new-home sales and the mixed signals from durable goods orders might temper USD strength. Given this mixed scenario, traders appear cautious, and the upcoming release of the USD PCE Price Index, excluding food and energy, will be crucial. A higher-than-expected reading could bolster the USD further, potentially putting downward pressure on the GBPUSD rate.

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What can we expect from GBPUSD today?

GBPUSD on Thursday rose 0.64% to 1.34110. Price is above 9-Day EMA while Stochastic is falling.

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 1.34594 with break above could target R2 at 1.35079 or figure level area. While towards the downside, we are looking at daily low of 1.33119 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.34341 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 0.73% over the past few days.

Key levels to watch out:

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