- GBP/USD trades marginally higher on the day at around 1.3100.
- UK employment data helps Pound Sterling hold its ground early Tuesday.
- The market mood could drive the pair's action in the absence of high-impact data releases.
GBP/USD closed the first trading day of the week in negative territory and continued to edge lower in the Asian session on Tuesday. After touching its lowest level in nearly three weeks at 1.3058, the pair staged a modest rebound. Nevertheless, the near-term technical outlook suggests that the bearish bias remains intact.
British Pound PRICE This week
The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the weakest against the US Dollar.
USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
---|---|---|---|---|---|---|---|---|
USD | 0.46% | 0.38% | 0.90% | 0.08% | 0.22% | 0.44% | 0.45% | |
EUR | -0.46% | -0.14% | 0.51% | -0.37% | -0.28% | 0.00% | -0.03% | |
GBP | -0.38% | 0.14% | 0.49% | -0.25% | -0.15% | 0.10% | 0.09% | |
JPY | -0.90% | -0.51% | -0.49% | -0.79% | -0.64% | -0.45% | -0.24% | |
CAD | -0.08% | 0.37% | 0.25% | 0.79% | 0.18% | 0.35% | 0.53% | |
AUD | -0.22% | 0.28% | 0.15% | 0.64% | -0.18% | 0.26% | 0.24% | |
NZD | -0.44% | -0.00% | -0.10% | 0.45% | -0.35% | -0.26% | -0.00% | |
CHF | -0.45% | 0.03% | -0.09% | 0.24% | -0.53% | -0.24% | 0.00% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
The UK's Office for National Statistics (ONS) reported on Tuesday that the ILO Unemployment Rate edged lower to 4.1% in the three months to July from 4.2%, as expected. The Employment Change came in at 265K in the same period, up sharply from 97,000 previously, while the annual wage inflation, as measured by the change in the Average Earnings Excluding Bonus, declined to 5.1% from 5.4%.
Although the UK labor market data helps Pound Sterling find a foothold, the risk-averse market atmosphere doesn't allow GBP/USD to gain traction. At the time of press, the UK's FTSE 100 Index was down nearly 0.5% on the day.
The US economic calendar will not feature any high-impact data releases on Tuesday. Hence, GBP/USD could struggle to attract bulls in case markets remain cautious in the American session. On Wednesday, the US Bureau of Labor Statistics will release the Consumer Price Index (CPI) data for August.
GBP/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the 4-hour chart stays below 40 after recovering from below-30, suggesting that GBP/USD's latest recovery was a technical correction.
On the downside, 1.3040 (Fibonacci 38.2% retracement level of the latest uptrend) aligns as next support before 1.3000 (psychological level, static level) and 1.2965-1.2970 (Fibonacci 50% retracement, 200-period SMA).
Interim resistance aligns at 1.3100 (static level) before 1.3130, where the 20-period, 50-period and the 100-period Simple Moving Averages meet the Fibonacci 23.6% retracement. If GBP/USD manages to clear that hurdle, it could extend its recovery toward 1.3200 (psychological level, static level).
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, aka ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
![AUD/USD bounces back above 0.6650, as focus shifts to US CPI](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/AUDUSD/macro-of-aussie-20-note-8668638_XtraSmall.jpg)
AUD/USD bounces back above 0.6650, as focus shifts to US CPI
AUD/USD is bouncing back above 0.6650 in the Asian session on Wednesday, helped by renewed US Dollar weakness. Further upside could be capped amid RBA Hunter's comments while traders wait on the sidelines ahead of the crucial US consumer inflation data.
![USD/JPY slumps to 141.50 after BoJ Nagakawa's hawkish comments](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/USDJPY/japanese-yen-62890274_XtraSmall.jpg)
USD/JPY slumps to 141.50 after BoJ Nagakawa's hawkish comments
USD/JPY meets fresh supply and plunges to its lowest in eight months to near 141.50. The Japanese Yen receives a boost from the hawkish commentary from BoJ board member Nagakawa. Traders now look to key US CPI report for further trading impetus.
![Gold price refreshes weekly top, tests short-term trading range hurdle ahead of US CPI](https://editorial.fxstreet.com/images/Markets/Commodities/Metals/Gold/safe-investment-gm147322399-17568598_XtraSmall.jpg)
Gold price refreshes weekly top, tests short-term trading range hurdle ahead of US CPI
Gold price attracts some buyers for the third straight day on Wednesday and touches a fresh weekly high, around the $2.520-2,521 region during the Asian session. The commodity, however, remains confined in a multi-week-old trading range as traders await the release of the latest US CPI figures due later today.
![Solana could rally as Breakpoint conference approaches](https://editorial.fxstreet.com/images/Markets/Currencies/Cryptocurrencies/Solana/Solana_Crypto_31_XtraSmall.jpg)
Solana could rally as Breakpoint conference approaches
Solana is up 0.5% on Tuesday, following significant growth in its network daily active addresses. Investors anticipate a potential rally as the Solana Breakpoint conference approaches.
![Five Fundamentals for the week: Jittery markets fear the ECB, US inflation and more](https://editorial.fxstreet.com/images/Macroeconomics/EconomicIndicator/Prices/CPI/consumer-price-index-gm500080630-80587217_XtraSmall.jpg)
Five Fundamentals for the week: Jittery markets fear the ECB, US inflation and more Premium
Is there still a chance? Investors hope for a 50-bps rate cut from the Fed but also fear a global recession is underway. The world's three largest economies, the US, China, and the eurozone, are set to rock global markets.
![Moneta Markets review 2024: All you need to know](https://editorial.fxstreet.com/images/IT/Testing/Review/FXSBadgeCertifiedBackg_XtraSmall.png)
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.