GBP to USD Forecasts: Bulls Eye $1.25 on US GDP and Jobless Claims

Bob Mason
Published: Jan 25, 2023, 23:49 UTC

It is a relatively quiet day for the GBP to USD. However, US economic indicators could give the Fed more reason to take its foot off the gas.

GBP to USD technical analysis - FX Empire

In this article:

It is a quiet day ahead for the GBP/USD. Early in the session, CBI distributive trade figures for January will be in the spotlight. The CBI Distributive Trade Survey provides a health check of the retail sector and is a leading indicator of retail sales.

Economists forecast a decline from 11 to -5 in January. In November, the indicator had stood at -19 versus 18 in October.

If last week’s retail sales figures for December are a guide, there could be a larger-than-forecasted decline in January, which would be price negative for the Pound. In December, retail sales slid by 1.0%, following a 0.5% decline in November.

While consumer spending is back in the spotlight, no Monetary Policy Committee Members are speaking today, leaving investors to monitor chatter with the media.

GBP/USD Price Action

At the time of writing, the Pound was up 0.15% to $1.24165. A mixed start to the day saw the GBP/USD fall to an early low of $1.23837 before rising to a high of $1.24182.

GBP to USD finds early support.
GBPUSD 260123 Daily Chart

Technical Indicators

The Pound needs to avoid a fall through the $1.2361 pivot to target the First Major Resistance Level (R1) at $1.2440. A return to $1.2420 would signal an extended breakout session. However, the Pound would need US stats to be Pound-friendly to support a breakout session.

In the event of an extended rally, the GBP to USD would likely test the Second Major Resistance Level (R2) at $1.2483 and resistance at $1.25. The Third Major Resistance Level sits at $1.2605.

A fall through the pivot would bring the First Major Support Level (S1) at $1.2319 into play. However, barring a data-fueled sell-off, the GBP/USD should avoid sub-$1.2250 and the second Major Support Level (S2) at $1.2240.

The Third Major Support Level (S3) sits at $1.2118.

GBP to USD resistance levels in play above the pivot.
GBPUSD 260123 1 Hourly Chart

Looking at the EMAs and the 4-hourly chart, the EMAs send a bullish signal. The GBP/USD sits above the 50-day EMA, currently at $1.23146. The 50-day EMA pulled further away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A hold above S1 ($1.2319) and the 50-day EMA ($1.23146) would support a breakout from R1 ($1.2440) to target R2 ($1.2483) and $1.25. However, a fall through S1 ($1.2319) and the 50-day EMA ($1.23146) would bring the 100-day EMA ($1.22509) and S2 $1.2240 into view. A fall through the 50-day EMA would send a bearish signal.

EMAs are bullish.
GBPUSD 260123 4-Hourly Chart

The US Session

It is a busy day ahead on the US economic calendar. US jobless claims, Q4 GDP, and durable goods orders will draw interest. Softer growth and a pickup in jobless claims would deliver further GBP/USD support.

While it is a busier day on the economic calendar, no FOMC members are speaking today to influence. The Fed entered the blackout period on Saturday, January 21.

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

Did you find this article useful?