GBPUSD pair sees marginal rise as UK and US economic indicators impact market sentiment

GBPUSD Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	0.02%	2.2 Pips
Week to-date	0.13%	16.9 Pips
October	-2.32%	-309.8 Pips

Upcoming key events (London Time)

Wed 07:00 AM GBP Consumer Prices Index (CPI) (12-mth)
Thu 01:30 PM USD Monthly Retail Trade (1-mth)

What happened lately

In the United States, the New York Empire State Manufacturing Index showed a significant decline, dropping to -11.9 points in October from 11.5 points in September, as reported by the New York Federal Reserve. This indicates a contraction in manufacturing activity within the state, suggesting potential economic headwinds for the manufacturing sector in the U.S., which could impact broader economic sentiment and confidence.

In the United Kingdom, the labor market demonstrated mixed signals according to the Office for National Statistics. The Claimant Count Rate remained consistent at 4.7% for September while the Claimant Count Change increased to 27.9K from 23.7K. Employment Change showed a positive trend, increasing to 373K in August from 265K in July, indicating overall job growth. However, average earnings both excluding and including bonuses showed a minor decline on a three-month basis, with figures dropping to 4.9% and 3.8% respectively for August. Meanwhile, the ILO Unemployment Rate decreased slightly to 4% in August from 4.1% in July, suggesting some stability in the labor market despite the variations in earnings growth.

The current economic data could influence the GBPUSD currency pair, which rose marginally by 0.02% to 1.30659, indicating consolidation. The contrasting economic performances of the U.S. and the U.K. are pivotal. The contraction in U.S. manufacturing might lead to a weaker U.S. dollar amid concerns of economic slowing, potentially supporting GBPUSD. In contrast, the U.K.’s stable unemployment rate and job growth could further bolster the pound if sustained. However, the decline in earnings growth might temper some optimism regarding the U.K.’s economic outlook. Future movements in GBPUSD will likely hinge on upcoming high-impact events, including the U.K.’s Consumer Prices Index data and U.S. Monthly Retail Trade figures, as they could indicate broader economic trends and influence central bank policy expectations.

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Tweets by Office for National Statistics

What can we expect from GBPUSD today?

GBPUSD on Tuesday rose 0.02% to 1.30659. Price is below 9-Day EMA while Stochastic is rising.

Updated daily direction for GBPUSD looks mixed as the pair is likely to consolidate above 1.30329 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 1.31028 or trades above daily pivot 1.30679. Break above could target R1 at 1.31008. While to the downside, we are looking at 1.30329 (S1) and daily low of 1.30349 as support levels. GBPUSD need to break on either side to indicate a short-term bias. A break above 1.31028 may suggest continuation after recent positive movement.

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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