Mixed US economic data impacts GBPUSD amid October decline

GBPUSD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	-0.43%	-55.1 Pips
Week to-date	-0.44%	-57.4 Pips
October	-3.55%	-475 Pips

Upcoming key events (London Time)

Fri 12:30 PM USD Nonfarm Payroll Employment

What happened lately

In the United States, economic data for September and the third quarter revealed mixed results. Personal Income saw a slight increase from 0.2% in August to 0.3% in September, according to the Bureau of Economic Analysis. The PCE Price Index presented a moderate rise of 0.2% compared to 0.1% the previous month. However, the 12-month PCE Price Index witnessed a marginal decrease to 2.1% from 2.2%. Notably, Consumer Spending experienced a decline, despite a revision of August’s figure from 0.2% to 0.3%. Furthermore, excluding food and energy, the PCE Index showed an uptick to 0.3% in September. The Department of Labor reported a reduction in Initial Unemployment Insurance Claims to 216,000. Despite these changes, the 12-month PCE, excluding food and energy, remained stable at 2.7%. The Employment Cost Index indicated a decline to 0.8% in the third quarter compared to 0.9% in the second quarter. Additionally, the U.S. GDP for the third quarter was lower at 2.8%, contrasting with 3.0% in the previous quarter. On a positive note, pending home sales surged significantly by 7.4% in September. However, declines were observed in the PCE excluding food and energy prices to 2.2% from 2.8% and PCE Price (3-month) to 1.5% from the previous 2.5%.

The recent economic indicators from the U.S. have the potential to impact GBPUSD, especially given the decline seen in October. The slight improvements in employment and pending home sales contrast with reductions in GDP and PCE indicators, highlighting economic uncertainty. As a result, this uneven economic performance could lead investors to adopt a cautious stance towards the USD, maintaining downward pressure on GBPUSD. Furthermore, upcoming economic data, including the Nonfarm Payroll Employment report, could influence currency movements and provide additional insights into U.S. economic health. The expectations around these upcoming indicators might affect investor confidence, which, in combination with the current economic data, has a significant bearing on the direction of GBPUSD.

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What can we expect from GBPUSD today?

GBPUSD on Thursday dropped -0.43% to 1.29008. 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 1.28296 with break below could see further selling pressure towards S2 at 1.27584. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 1.29996 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 1.28434 would indicate selling pressure.

For the week to-date, take note that GBPUSD is bearish as the pair posted lower by -0.44%.

GBPUSD ended month of October trading session down by -3.55% or -475 pips lower.

Key levels to watch out:

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