GBPUSD on Friday dropped -0.13% to 1.31160. Week ending 2024-10-04 moved lower by -2%. What you need to know.

GBPUSD Analysis

Performance
Period	Pct	Chg	Momentum
Friday	-0.13%	-17.4 Pips
Week 2024-10-04	-2%	-267.3 Pips
October	-1.94%	-260.1 Pips

Upcoming key events for the new week (London Time)

Wed 07:00 PM FOMC Meeting Minutes
Thu 01:30 PM Initial Unemployment Insurance Claims
Thu 01:30 PM CPI Inflation Rate (12-mth)
Fri 01:30 PM Producer Price Index (12-mth)

What happened over the week

The United States saw a decline in the unemployment rate from 4.2% in August to 4.1% in September, as reported by the Bureau of Labor Statistics. This positive trend was accompanied by a fall in the U-6 Total measure of labor underutilization from 7.9% to 7.7% over the same period. Nonfarm payroll employment demonstrated growth, with an increase to 254,000 in September, up from the adjusted figure of 159,000 in August. Although average hourly earnings for the month experienced a slight decrease from 0.5% in August to 0.4% in September, there was an annual increase in average hourly earnings, rising to 4% from 3.9%. New orders for manufactured goods saw a decline of 0.2% in August, reflecting a decrease from the revised 4.9% growth observed in July, according to the Census Bureau. Furthermore, initial unemployment claims rose to 225,000 by the end of September, higher than the previous figure. The Job Openings and Labor Turnover Survey (JOLTS) indicated an increase in job openings to 8.04 million in August, up from July’s revised 7.711 million. These data sets highlight a strengthening U.S. labor market, albeit with some mixed signals regarding wage growth and new manufacturing orders.

In the United Kingdom, the GDP growth rate for the second quarter showed a downturn in both year-over-year and quarter-over-quarter figures. The year-over-year GDP growth rate decreased to 0.7% in Q2, down from 0.9% in Q1, as reported by the Office for National Statistics. Similarly, the quarter-over-quarter GDP rate fell to 0.5% from 0.6%. This indicates a tapering economic growth in the UK, reflecting potential challenges for future expansion.

The impact of these economic events on the GBPUSD currency pair is significant. With the U.S. labor market reflecting strong job creation and stable unemployment figures, the U.S. dollar is likely to maintain its strength. In contrast, the UK shows declining GDP growth, which could further weaken the British pound. Recently, GBPUSD dropped by 0.13% to 1.31160, showing a weekly decline of 2%. Upcoming key U.S. economic indicators such as the FOMC Meeting Minutes, CPI Inflation Rate, and Producer Price Index could further influence the pair. A continuation of positive U.S. economic data may strengthen the dollar, potentially driving GBPUSD lower unless offset by significant upward adjustments in the UK economic outlook.

From X (Twitter)

GDP is estimated to have grown 0.5% in Quarter 2 (Apr to June) 2024, revised down slightly from an initial estimate of 0.6%

Read more➡️ https://t.co/BltQtOYeWF pic.twitter.com/vg8LdbyVpz

— Office for National Statistics (ONS) (@ONS) September 30, 2024

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

GBPUSD on Friday dropped -0.13% to 1.31. Price is below 9-Day EMA while Stochastic is falling. For the week ending 2024-10-04, the pair dropped -2% or -267.3 pips lower.

Looking ahead, GBPUSD looks bearish as the pair posted lower in Friday trading session.

For the new week, our technical outlook looks bearish, immediate support level is at 1.30 (WS1) with break below could see further selling pressure towards 1.29 (WS2). For potential buyers, as the current momentum is bearish, we prefer to look at firm break of the week high of 1.34 as an important indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below week low of 1.31 would indicate selling pressure.

For the month of October, GBPUSD is down by -1.94% or -260.1 pips lower.

Weekly key levels to watch out:

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