GBP/USD forecast: signal for week of 13th – 18th August

August 13, 2023 07:43 AM PDT | By Invezz
 GBP/USD forecast: signal for week of 13th – 18th August
Image source: Invezz

The GBP/USD exchange rate moved sideways on Friday after the UK published encouraging economic numbers. The pair was trading at 1.2693 on Friday, a few points above last week’s low of 1.2690.

UK inflation data ahead

The GBP/USD pair had several important catalysts last week. On Thursday, the US published the latest consumer price index (CPI) data. Accordin to the Bureau of Labor Statistics (BLS), the headline inflation rose from 3.0% in June to 3.2% in July while core inflation slipped from 4.8% to 4.7%. Excluding housing, the picture of inflation was better than expected.

The other important GBP news was the latest UK GDP numbers that came out on Friday. According to the Office of National Statistics (ONS), the UK narrowly avoided a recession in Q2 as I wrote here. The economy expanded by 0.2% during the quarter as the cost of living crisis continued.

Looking ahead, there will be several important GBP/USD news to watch this week. First, the UK will publish the latest jobs numbers on Tuesday. Economists expect the numbers to reveal that the unemployment rate remained at 4.0% in June as wages rose by 7%. 

The next data to watch will be the latest UK consumer price index (CPI) data on Wednesday. Economists expect the numbers to show that the headline CPI dropped from 7.9% in May to 6.8% in June. They also see the core CPI moving from 6.9% to 7.4%, putting pressure on the Bank of England.

The other key USD news will be the upcoming US retail sales number. With inflation falling and the unemployment rate being at a 50-year low, analysts believe that sales continued rising in July.

Further, the US will publish numbers like housing starts, building permits, and the FOMC minutes of the last meeting.

GBP/USD technical analysis

GBP/USD chart by TradingView

The GBP to USD exchange rate has been in a downward trend in the past few days. In this period, it has fallen from the year-to-date high of 1.3140 to 1.2700. It has moved below the lower side of the rising channel shown in blue.

The pair has also dropped below the 25-day and 50-day moving averages, signaling that bears are in control. Therefore, the outlook for this week will be bearish, with the next support level to watch being at 1.2450, the highest point in December and January.

The post GBP/USD forecast: signal for week of 13th – 18th August appeared first on Invezz.


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