GBP/USD Market Analysis: A Comprehensive Overview
Recent Market Movements
- GBP/USD turned bearish and dropped back below 1.34 on Wednesday.
- Markets pared back their recent tilt into a Pound Sterling bull run.
- The US Dollar recovered ground as investors weigh the state of the US economy.
On Wednesday, GBP/USD took a bearish turn, falling below the 1.3400 mark amidst a broader market pullback from heightened risk appetite. The Pound Sterling paused its upward trend, while the US Dollar regained some lost ground.
Upcoming Economic Events
The Pound Sterling is not expected to feature prominently in economic data for the rest of the week. However, traders will be focusing on Friday’s US inflation data release, which could impact GBP/USD movements.
Recent US consumer confidence indicators showed a decline, indicating that the average consumer is less optimistic about the economy compared to the stock market. This Friday, the US will release updated Personal Consumption Expenditure (PCE) inflation figures, shedding light on consumer sentiment.
In addition, new home sales in the US dipped in August, while GDP growth for the second quarter is expected to remain stable at 3.0% on an annualized basis. Thursday will also see several speeches from Fed officials, including Fed Chair Jerome Powell, providing further insights into the US economic outlook.
Economic Indicator: New Home Sales Change (MoM)
The number of New Home sales released by the US Census Bureau is a crucial measure of housing market conditions. This data reflects the demand for goods, services, and employment stimulated by house buyers. A high reading is considered bullish for the USD, while a low reading is seen as bearish.
Last release: Wed Sep 25, 2024 14:00
Frequency: Monthly
Actual: -4.7%
Previous: 10.6%
Source: US Census Bureau
GBP/USD Price Forecast
Following Wednesday’s bearish reversal, GBP/USD has dipped below 1.3400, signaling a potential downward trend. Short sellers may target the 50-day Exponential Moving Average (EMA) at 1.3062, while buyers will aim to push the pair back towards recent highs at 1.3430.
GBP/USD Daily Chart
Pound Sterling FAQs
Key Information about Pound Sterling (GBP)
- Oldest Currency: GBP is the oldest currency in the world, dating back to 886 AD.
- Trading Volume: GBP accounts for 12% of all FX transactions, with an average daily volume of $630 billion.
- Key Trading Pairs: GBP/USD, GBP/JPY, and EUR/GBP are the most traded pairs involving GBP.
Factors Influencing GBP Value
- Monetary Policy: Decisions by the Bank of England, especially regarding interest rates, play a crucial role in shaping GBP value.
- Economic Data: Indicators like GDP, PMIs, and employment figures impact GBP based on the overall health of the economy.
- Trade Balance: The trade balance of the UK influences GBP value, with a positive balance strengthening the currency.