Gbpusd exchange rate drops amid weak us economic indicators

GBPUSD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	-1.02%	-135 Pips
Week to-date	-1.92%	-256.4 Pips
October	-1.86%	-249.2 Pips

Upcoming key events (London Time)

Fri 01:30 PM USD Nonfarm Payroll Employment

What happened lately

In the United States, economic data revealed a decrease in new orders for manufactured goods in August, marking a -0.2% change from the revised prior month’s figure of 4.9%. This report, sourced from the Census Bureau, indicates a slowdown in demand for manufactured products, which could be a sign of a cooling manufacturing sector. Moreover, the U.S. labor market exhibited slight signs of strain as initial unemployment insurance claims increased to 225,000 in the week ending September 28, from a revised figure of 219,000 the previous week. This data, released by the Department of Labor, suggests a marginal uptick in unemployment claims, hinting at possible vulnerabilities in the labor market.

Meanwhile, the GBPUSD exchange rate experienced a notable decline of -1.02% on Thursday, settling at 1.31272. This depreciation could be largely attributed to weaker economic indicators from the U.S., although other geopolitical or market factors may also have influenced the rate. Investors and market participants are keenly anticipating forthcoming U.S. economic data, specifically the high-impact Nonfarm Payroll Employment report, scheduled for release on Friday at 01:30 PM. This report could further delineate the strength or weakness of the U.S. job market and impact both the U.S. dollar and competing foreign currencies such as the British pound.

The recent U.S. economic developments, particularly the downturn in manufacturing orders and rising unemployment claims, could negatively influence the U.S. dollar, leading to a potentially counteracting stronger British pound against the greenback. However, much will depend on the nonfarm payroll data. If the employment data surpass expectations, it could bolster the U.S. dollar and apply downward pressure on the GBPUSD pair. Conversely, if the figures were to disappoint, it could afford the pound some resurgence against the dollar. Therefore, traders should closely monitor these economic releases as they pose significant implications for the forex market, specifically the GBPUSD pair.

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What can we expect from GBPUSD today?

GBPUSD on Thursday dropped -1.02% to 1.31272. Price is below 9-Day EMA while Stochastic is falling.

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

Looking ahead for the day, immediate support level is at S1 1.30569 with break below could see further selling pressure towards S2 at 1.29865. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 1.32674 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 1.30918 would indicate selling pressure.

For the week to-date, take note that GBPUSD is bearish as the pair posted lower by -1.92%.

Key levels to watch out:

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