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25/10/24
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GBP/USD Consolidates Above Key Level Amid US Economic Data Watch
The GBP/USD currency pair is currently in a phase of consolidation after managing to close on a positive note on Thursday. The prevailing interest from technical buyers is likely to persist as long as the pair remains above the 1.2970 level. On the upcoming economic calendar for the US, data on Durable Goods Orders for September will be closely monitored.
Following a notable drop on Wednesday, GBP/USD rebounded on Thursday with gains exceeding 0.4%. As Friday’s European session unfolds, the pair is oscillating within a narrow range just below the 1.3000 level. The US Dollar, which had shown resilience earlier in the week, lost momentum, culminating in a 0.4% decline in the US Dollar Index. Enhanced risk sentiment has made it challenging for the USD to attract buyers, compounded by a pullback in US Treasury yields.
Economic indicators on Friday, including Durable Goods Orders and the October index of consumer sentiment from the University of Michigan, are on the agenda. The consumer sentiment data is anticipated to have limited impact as it represents a revision rather than a new release. Conversely, if Durable Goods Orders show unexpected growth, this may lend support to the USD. A decline greater than the projected -1% could exert further downward pressure on the currency and potentially allow GBP/USD to gain ground as the weekend approaches.
Simultaneously, US stock index futures are indicating a modest increase, ranging between 0.1% and 0.2%. A positive opening on Wall Street could enhance risk appetite and further weaken the USD in the latter part of the day.
From a technical standpoint, GBP/USD is positioned within the upper section of a descending regression channel and remains comfortably above the 100-day Simple Moving Average (SMA) at 1.2970. The Relative Strength Index (RSI) on the 4-hour chart is just above the midpoint of 50, signaling a current indecision among sellers. If GBP/USD consistently utilizes the 1.2970 level as a foundation, it could entice buyers, with immediate resistance observed around 1.3000 – 1.3010 and subsequent levels at 1.3050 and 1.3100. On the downside, support levels are noted at 1.2900 and 1.2800.
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