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 | 0.62% | 78.4 Pips |  |
||
| Week 2024-08-02 | -0.53% | -68.3 Pips |  |
||
| August | -0.41% | -53 Pips | |
||
Upcoming key events for the new week (London Time)
Thu 01:30 PM Initial Unemployment Insurance Claims
What happened over the week
The economic data from the United States indicates a general downturn. The U.S. factory orders fell significantly in June to -3.3% from -0.5% in May, reflecting a weakening in manufacturing demand according to the Census Bureau. The Bureau of Labor Statistics reported that average hourly earnings growth slowed in July to 0.2% from 0.3% in June, and nonfarm payroll employment for July dropped to 114,000 from a revised 179,000 in June. These figures suggest a cooling labor market. Additionally, the Q2 flash estimate for U.S. unit labor costs fell substantially to 0.9% from 4% in Q1, while nonfarm business labor productivity rose to 2.3% from 0.2% in Q1. Initial unemployment claims for the week ending July 27 increased to 249,000 from 235,000 as reported by the Department of Labor, signaling a rise in joblessness. The U.S. Employment Cost Index (ECI) in Q2 decreased to 0.9% from 1.2% in Q1, and the Job Openings and Labor Turnover Survey (JOLTS) for June dropped slightly to 8.184 million from a revised 8.23 million in May. The House Price Index in May stagnated at 0% compared to a revised 0.3% in April, reflecting a subdued housing market. Despite these factors, the Federal Reserve’s interest rate decision remained unchanged at 5.5%, showing steadiness in monetary policy.
In the United Kingdom, the Bank of England’s interest rate decision saw a decrease to 5% from the previous 5.25%, reflecting a potential easing in monetary policy amidst economic pressures.
The combination of these economic data points from both the U.S. and the U.K. significantly affects the GBPUSD currency pair. The weaker economic indicators in the U.S., particularly the drop in factory orders, employment figures, and wage growth, generally suggest a slowdown in the U.S. economy which could weaken the U.S. dollar. On the other hand, the Bank of England’s decision to lower interest rates might be perceived as a dovish stance, potentially impacting the British pound negatively. However, the cumulative negative sentiment surrounding the U.S. economic data and a steady Fed rate could make the GBPUSD pair more favorable for the pound in comparison to the dollar. This dynamic led to a 0.62% increase in GBPUSD on Friday, although it moved lower by -0.53% for the week ending August 2, indicating volatility and mixed sentiment in the currency market.
What can we expect from GBPUSD for the new week and what happened on Friday?
GBPUSD on Friday rose 0.62% to 1.28001. Price is below 9-Day EMA while Stochastic is rising. For the week ending 2024-08-02, the pair dropped -0.53% or -68.3 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 1.27162 (WS1) with break below could see further selling pressure towards 1.26324 (WS2). For potential buyers, as the current momentum is bearish, we prefer to look at firm break of the week high of 1.28651 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 1.27068 would indicate selling pressure.
For the month of August, GBPUSD is down by -0.41% or -53 pips lower.
Weekly key levels to watch out:
| R3 | 1.30328 |
| R2 | 1.29490 |
| R1 | 1.28745 |
| Weekly Pivot | 1.27907 |
| S1 | 1.27162 |
| S2 | 1.26324 |
| S3 | 1.25579 |
