- GBP/USD cycled on Monday just above 1.2900 with low momentum.
- A quiet start to the week gives way to key data prints for both the US and the UK.
- Wednesday kicks off the week’s meaningful data with UK and US PMIs.
GBP/USD slid sideways on Monday, churning just north of 1.2900 as markets take a breather from last week’s late surge in Greenback bidding. The Cable is cycling an intraday technical level near 1.2925 as markets brace for a fresh round of key data due on both sides of the Atlantic beginning on Wednesday.
Forex Today: Key US data prompt some caution
Monday opened the new trading week on a quiet note as the economic data docket remains thin for the early week. Tuesday brings mid-tier US Existing Home Sales Change for June, while GBP/USD traders will be looking ahead to Wednesday’s double-header of Purchasing Managers Index (PMI) data prints. The UK’s Manufacturing and Services PMI for July are expected to tick up slightly, with MoM Services PMI numbers expected to print at 52.5 compared to the previous month’s 52.1.
The US follows up on Wednesday with its own PMIs. Forecasting models are expecting July’s US Services PMI to ease back to 54.4 versus the previous 55.3. Thursday will continue the high-impact US data trend with annualized Gross Domestic Product (GDP) for 2024’s second quarter. Key US inflation data will round out the trading week with Friday’s US Personal Consumption Expenditure - Price Index (PCE) inflation.
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 strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.00% | 0.01% | -0.02% | 0.00% | 0.00% | 0.01% | 0.04% | |
| EUR | -0.01% | 0.02% | 0.00% | 0.01% | -0.02% | -0.01% | 0.02% | |
| GBP | -0.01% | -0.02% | 0.00% | -0.01% | -0.01% | -0.00% | 0.01% | |
| JPY | 0.02% | 0.00% | 0.00% | 0.02% | -0.00% | -0.00% | 0.00% | |
| CAD | -0.00% | -0.01% | 0.00% | -0.02% | -0.01% | -0.01% | 0.02% | |
| AUD | -0.00% | 0.02% | 0.01% | 0.00% | 0.01% | 0.00% | 0.05% | |
| NZD | -0.01% | 0.01% | 0.00% | 0.00% | 0.01% | -0.01% | 0.02% | |
| CHF | -0.04% | -0.02% | -0.01% | -0.01% | -0.02% | -0.05% | -0.02% |
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).
GBP/USD technical outlook
Despite being knocked off recent 12-month highs above 1.3000, Cable continues to bid above 1.2900. The pair remains firmly planted in bull country. The pair’s recent backslide still leaves bids trading well north of the 200-day Exponential Moving Average (EMA) at 1.2635.
Near-term price action remains constrained around the 200-hour EMA at 1.2922, with an intraday technical floor priced in near 1.2900.
GBP/USD hourly chart
GBP/USD daily chart
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 stays defensive below 0.6650 amid China worries
AUD/USD seems vulnerable below 0.6650 in Asian trading on Tuesday, undermined by mounting worries over China's economic slowdown. The Aussie shrugs off small rate cuts by the PBOC and a subdued US Dollar. Pre-US earnings results caution also weighs on the pair.
USD/JPY keeps losses below 157.00, as risk-off mood returns
USD/JPY remains under pressure below 157.00 early Tuesday. The Japanese Yen stays bid as risk-off flows return in the Asian session, sustaining the US Dollar weakness-driven downside in the pair. The pair looks to Japanese verbal intervention and mid-tier US data.
Gold price moves away from over one-week low, climbs back above $2,400 mark
Gold price extended its recent corrective slide from the record high touched last week and fell to a more than one-week trough on Monday. US President Joe Biden's withdrawal from the 2024 Presidential election increased the chances of Donald Trump becoming the next US President, raising hopes of a looser regulatory environment.
This week could be explosive for ETH: Ethereum ETFs to debut in the US on Tuesday
Ethereum is down nearly 1% on Monday as the SEC confirmed via its website on Tuesday that it has given the final approval for spot ETH ETFs. Considering the ETH ETF launch and the upcoming Bitcoin Conference, this week could prove crucial for Ethereum.
Earnings review
In recent years, the focus has been on the Magnificent 7, particularly Nvidia’s monster earnings reports, which have dominated the market. While Nvidia’s results are still extremely important for overall sentiment, there is a hope that sales growth and revenues can pick up across a broad range of global markets and sectors.