GBPUSD on Friday rose 0.89% to 1.32140. Week ending 2024-08-23 rose 2.06%. What’s going on.

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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	0.89%	116.1 Pips
Week 2024-08-23	2.06%	266.8 Pips
August	2.81%	360.9 Pips

Upcoming key events for the new week (London Time)

  Thu 01:30 PM Initial Unemployment Insurance Claims
  Thu 01:30 PM GDP annual rate
  Fri 01:30 PM PCE Price Index (excluding food and energy) (1-mth)
  Fri 01:30 PM PCE Price Index (excluding food and energy) (12-mth)

What happened over the week

In the United States, Federal Reserve Chair Jerome Powell indicated a likelihood of potential rate cuts in the near term during his speech at Jackson Hole Symposium, citing a cooling labor market and broader economic uncertainties. Additionally, data from the Department of Labor revealed that the U.S. Initial Unemployment Insurance Claims for the week ending August 17 rose to 232,000, which is an increase from the revised figure of 228,000 the previous week.

In the United Kingdom, the GfK Consumer Confidence for August remained unchanged at -13 points, maintaining the same level as July. This stagnation in consumer confidence suggests that there might not be immediate changes in domestic economic activity or sentiment. The static confidence metric reflects continued cautiousness among consumers despite various economic headwinds.

The mixed economic signals from these two major economies impacted the GBPUSD currency pair significantly. On Friday, GBPUSD rose 0.89% to 1.32140, marking an increase of 2.06% for the week ending August 23, 2024. Anticipation of potential rate cuts by the Federal Reserve generally weakens the USD as lower interest rates make the dollar less attractive for investors. Coupled with less-than-stellar unemployment data, this perception of a softer U.S. economy can lead to a stronger GBPUSD. However, with upcoming high-impact U.S. economic events, including the Initial Unemployment Insurance Claims, GDP annual rate, and PCE Price Index (both monthly and annual), the market will keenly observe these data points for further cues. Any significant deviations from expectations in these reports could cause substantial volatility in the GBPUSD rate. With the U.K. consumer confidence stable but not improving, the relative strength of GBPUSD will be highly contingent on these forthcoming U.S. metrics and the market’s reaction to further news and reports.

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

GBPUSD on Friday rose 0.89% to 1.32140. Price is above 9-Day EMA while Stochastic is rising in overbought zone. For the week ending 2024-08-23, the pair rose 2.06% or 266.8 pips higher.

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

As for the new week, our technical outlook looks bullish, immediate upside resistance level at 1.33041 (WR1) with break above could target 1.33941 (WR2). On the downside, we are looking at week low of 1.29756 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.32299 would suggest bullish bias after recent positive movement.

For the month of August, GBPUSD is up by 2.81% or 360.9 pips higher.

Weekly key levels to watch out: