GBPUSD on Friday rose 0.3% to 1.33210. Week ending 2024-09-20 rose 1.39%. What’s going on.

GBPUSD Analysis

Performance
Period	Pct	Chg	Momentum
Friday	0.3%	40.4 Pips
Week 2024-09-20	1.39%	183 Pips	September	1.18%	154.8 Pips

Upcoming key events for the new week (London Time)

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

What happened over the week

In the United Kingdom, retail sales figures for August have shown a notable improvement. Monthly retail sales volumes excluding fuel rose to 1.1% from 0.7% in July, while overall retail sales volumes increased to 1% in August compared to 0.5% in July, according to the Office for National Statistics. Additionally, the annual growth in retail sales excluding fuel was recorded at 2.3% in August, up from 1.4% in July. Consumer confidence, however, has seen a steep decline, with the GfK Consumer Confidence index dropping to -20 points in September from -13 points in August, indicating weaker consumer sentiment. Furthermore, the Bank of England kept its interest rate steady at 5%. The U.K. inflation figures showed mixed results with the Retail Price Index falling slightly to 3.5% in August, down from 3.6% in July, and the Core CPI inflation rate rising to 3.6% from 3.3% in July.

In the United States, economic indicators have presented a mixed bag. The Philadelphia Fed reported that the Manufacturing Business Outlook Survey increased to 1.7 points in September from -7 points in August, suggesting an improvement in manufacturing conditions. Initial unemployment claims in the week ending September 14 dropped to 219K from a revised figure of 231K the previous week, according to the Department of Labor. Building permits and housing starts in August also showed positive trends, rising to 1.475 million and 1.356 million respectively, as reported by the Census Bureau. However, the Federal Reserve’s interest rate decision was lower than expected, dropping to 5% from the previous 5.5%, with future rate projections also revised downwards to 4.4% from 5.1%.

The news will likely have a mixed effect on the GBPUSD currency pair. The positive retail sales data from the U.K. could provide some support for the British Pound, reflecting stronger economic activity. However, the significant decline in consumer confidence to -20 points could weigh down the sentiment towards the GBP. On the American side, the stronger manufacturing outlook and reduced unemployment claims could bolster the U.S. Dollar. However, the dovish tone from the Federal Reserve with lower-than-expected interest rates and projections might limit the upside potential for the USD. Considering these factors, GBPUSD could experience volatility but might lean towards a cautious or slightly bullish stance given the current data points.

From X (Twitter)

The Monetary Policy Committee voted by a majority of 8-1 to maintain #BankRate at 5%. Find out more: https://t.co/gtDedxNasg pic.twitter.com/hEv9kiIuDl

— Bank of England (@bankofengland) September 19, 2024

What can we expect from GBPUSD for the new week and what happened on Friday?

GBPUSD on Friday rose 0.3% to 1.33. Price is above 9-Day EMA while Stochastic is rising. For the week ending 2024-09-20, the pair rose 1.39% or 183 pips higher.

Looking ahead, GBPUSD looks bullish as the pair ended higher after Friday trading session.

For the new week, our technical outlook looks bullish, immediate upside resistance level at 1.34 (WR1) with break above could target 1.35 (WR2). On the downside, we are looking at week low of 1.32 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.33 would suggest bullish bias after recent positive movement.

For the month of September, GBPUSD is up by 1.18% or 154.8 pips higher.

Weekly key levels to watch out:

You might also be interested in:

Bank Rate maintained at 5% – September 2024 Source: Bank of England
Retail sales, Great Britain: August 2024 Source: National Statistics
Retail sales, Great Britain: August 2024 time series Source: National Statistics
U.S. International Transactions, 2nd Quarter 2024 Source: Bureau of Economic Analysis
Federal Reserve Board and Federal Open Market Committee release economic projections from the September 17-18 FOMC meeting Source: Federal Reserve
Federal Reserve issues FOMC statement Source: Federal Reserve
New Residential Construction Source: Census Bureau
Manufacturing and Trade Inventories and Sales Source: Census Bureau
Producer price inflation, UK: August 2024 Source: National Statistics
Consumer price inflation, UK: August 2024 time series Source: National Statistics
Producer price inflation, UK: August 2024 time series Source: National Statistics
Consumer price inflation, UK: August 2024 Source: National Statistics
Advance Monthly Sales for Retail and Food Services Source: Census Bureau