GBPUSD on Friday rose 0.27% to 1.30480. Week ending 2024-10-18 moved lower by -0.01%. What happened.

GBPUSD Analysis

Performance
Period	Pct	Chg	Momentum
Friday	0.27%	35.5 Pips
Week 2024-10-18	-0.01%	-1 Pips
October	-2.45%	-328.1 Pips

Upcoming key events for the new week (London Time)

Thu 01:30 PM Initial Unemployment Insurance Claims

What happened over the week

In the United States, several key economic indicators showed a downturn in September. The U.S. Building Permits saw a decline, dropping to 1.428 million from a revised 1.47 million in August, as reported by the Census Bureau. Additionally, Housing Starts decreased to 1.354 million from an adjusted 1.361 million the previous month. However, the U.S. Manufacturing Business Outlook Survey improved significantly in October, rising to 10.3 points from 1.7 points, indicating potential optimism in the manufacturing sector according to the Philadelphia Fed. Retail trade also saw a slight improvement, with monthly retail trade figures increasing to 0.4% from 0.1%. Labour market data showed a decline in Initial Unemployment Insurance Claims to 241,000, down from 258,000 in the previous week, as per the Department of Labor.

In the United Kingdom, the economic landscape depicted mixed signals. U.K. Retail Sales Volumes slipped to 0.3% in September from 1% in August, as reported by the Office for National Statistics, although year-over-year sales volumes climbed markedly to 3.9% from a revised 2.3%. Excluding fuel, retail sales volumes also decreased to 0.3% from 1.1% in the prior month. Consumer Prices Index (CPI) fell to 0% in September from 0.3%, with the 12-month figure reducing to 1.7% from 2.2%. Core CPI Inflation Rate over 12 months decreased slightly to 3.2% from 3.6%. In terms of production, the Producer Price Index for Output registered a decline of -0.7% compared to a 0.2% rise in August. The labor market showed an increase in the Labour Force Survey Employment Change to 373,000 in August from 265,000, while the ILO Unemployment Rate slightly decreased to 4% from 4.1% in July.

The recent developments in both the U.S. and U.K. economies have contrasting impacts on the GBP/USD exchange rate. Although both countries experienced declines in some economic indicators, the improvement in the U.S. Manufacturing Outlook and labor market possibly strengthens the dollar against the pound. Meanwhile, despite improvements in year-over-year retail sales and employment in the U.K., the decrease in CPI and mixed producer prices may apply downward pressure on the pound. Consequently, the GBP/USD exchange rate witnessed a slight rise of 0.27% to 1.30480 on Friday but moved lower by 0.01% over the week, reflecting market uncertainties and investors’ sentiment towards upcoming unemployment data in the U.S., as outlined in upcoming events.

From X (Twitter)

CPI rose by 1.7% in the 12 months to September 2024, down from 2.2% in August 2024.

Read the release ➡️ https://t.co/VlulVDztIW pic.twitter.com/iv83ietkiz

— Office for National Statistics (ONS) (@ONS) October 16, 2024

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

GBPUSD on Friday rose 0.27% to 1.30. Price is below 9-Day EMA while Stochastic is rising. For the week ending 2024-10-18, the pair dropped -0.01% or -1 pips lower.

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

For the new week, our technical outlook is mixed. To see upside interest, we prefer to look at price breakout of week high of 1.31 or at least consolidates above Weekly Pivot level of 1.30. On the downside, we are looking at week low 1.30 or 1.30 (WS1) as immediate support level. GBPUSD need to break on either side to indicate a short-term bias. A close below week low of 1.30 would indicate selling pressure.

For the month of October, GBPUSD is down by -2.45% or -328.1 pips lower.

Weekly key levels to watch out:

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New Residential Construction Source: Census Bureau
Manufacturing and Trade Inventories and Sales Source: Census Bureau
Retail sales, Great Britain: September 2024 Source: National Statistics
Retail sales, Great Britain: September 2024 time series Source: National Statistics
Advance Monthly Sales for Retail and Food Services Source: Census Bureau
People claiming unemployment benefits by constituency Source: House of Commons
Consumer price inflation, UK: September 2024 Source: National Statistics
Producer price inflation, UK: September 2024 including services, July to September 2024 time series Source: National Statistics
Consumer price inflation, UK: September 2024 time series Source: National Statistics
Producer price inflation, UK: September 2024 including services, July to September 2024 Source: National Statistics
Minutes of the Board’s discount rate meetings on September 9 and 18, 2024 Source: Federal Reserve
UK labour market: October 2024 Source: National Statistics