Dear ,
As requested, let’s look at GBPUSD and the recent events that happened in the previous trading session.
GBPUSD Analysis
| Performance | |||||
| Period | Pct | Chg | Momentum | ||
| Friday | 0.04% | 5.3 Pips |  |
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| Week 2024-07-26 | -0.54% | -69.9 Pips |  |
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| July | 1.7% | 214.6 Pips | |
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Upcoming key events for the new week (London Time)
Wed 07:00 PM Fed Interest Rate Decision (Federal Funds Rate)
Thu 12:00 PM Bank of England Interest Rate Decision (Bank Rate)
Thu 01:30 PM Initial Unemployment Insurance Claims
Fri 01:30 PM Nonfarm Payroll Employment
Fri 01:30 PM Average Hourly Earnings (1-mth)
Fri 01:30 PM Average Hourly Earnings (12-mth)
What happened over the week
In the United States, the Michigan Index of Consumer Sentiment saw a slight increase to 66.4 points in July, up from 66 points in June, reflecting marginally improved consumer confidence according to the University of Michigan. Personal Consumption Expenditures (PCE) – Price Index showed mixed results: the 12-month rate in June decreased to 2.5% from 2.6% in May, as reported by the Bureau of Economic Analysis, while the 1-month rate slightly increased to 0.1% from 0% in the same period. The U.S. GDP annual rate in the Q2 flash estimate surged to 2.8%, significantly higher than the 1.4% recorded in Q1, indicating stronger economic growth.
However, U.S. Durable Goods – New Orders in June exhibited a notable decline, plummeting to -6.6% from 0.1% in May, based on data from the Census Bureau. Conversely, Durable Goods Orders excluding Transportation showed improvement, rising to 0.5% in June from -0.1% in May. The labor market data was also positive, with Initial Unemployment Insurance Claims for the week ending 20 July dropping to 235,000 from 245,000, as revised by the Department of Labor. Additionally, U.S. New-Home Sales Change (1-mth) in June improved, narrowing to -0.6% from a revised -14.9% in May.
The latest economic data from the United States presents a mix of positive and negative indicators. While the GDP growth and labor market data support a favorable economic outlook, the significant drop in durable goods orders raises concerns about future manufacturing demand. For the GBPUSD, these factors suggest a complex influence. On Friday, GBPUSD rose 0.04% to 1.28632, but for the week ending 2024-07-26, it moved lower by -0.54%. The slight improvement in consumer sentiment and lower-than-expected PCE inflation could boost confidence in the U.S. economy, which might strengthen the USD against the GBP. However, the decline in durable goods orders may exert downward pressure on the USD, adding volatility to the pair. Balancing these influences will depend on market sentiment and future economic releases from both the U.S. and the U.K.
What can we expect from GBPUSD for the new week and what happened on Friday?
GBPUSD on Friday rose 0.04% to 1.28632. Price is below 9-Day EMA while Stochastic is falling. For the week ending 2024-07-26, the pair dropped -0.54% or -69.9 pips lower.
Looking ahead on Monday, GBPUSD looks bullish as the pair ended higher after Friday trading session.
For the new week, our technical outlook looks bearish, immediate support level is at 1.28290 (WS1) with break below could see further selling pressure towards 1.27949 (WS2). For potential buyers, as the current momentum is bearish, we prefer to look at firm break of the week high of 1.29383 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 1.28495 would indicate selling pressure.
For the month of July, GBPUSD is up by 1.7% or 214.6 pips higher.
Weekly key levels to watch out:
| R3 | 1.30066 |
| R2 | 1.29725 |
| R1 | 1.29178 |
| Weekly Pivot | 1.28837 |
| S1 | 1.28290 |
| S2 | 1.27949 |
| S3 | 1.27402 |
