GBP/USD Market Analysis Report

Market Review

Yesterday, GBP/USD exhibited a moderate upward trend, with the closing price rising by 0.18% and the daily volatility reaching 0.57%. The pair continues to hover near the key resistance zone of 1.2845. This upward movement was primarily driven by a series of economic data releases:

UK Economic Data:

Q2 GDP Annual Growth Rate Revision: The revised figure met expectations, rising from the previous 0.30% to 0.90%. This reflects strong economic performance in the UK during the second quarter, further solidifying market confidence in the British pound.
Three-Month GDP Monthly Growth Rate: The actual value came in at 0.6%, in line with market expectations, indicating steady economic growth in the UK.
Manufacturing Output Monthly Rate: The actual value was 1.1%, significantly exceeding the market expectation of 0.1%, indicating a strong recovery momentum in the UK manufacturing sector.
Industrial Output Monthly Rate: The actual value was 0.8%, also surpassing the expected 0.1%, providing additional support to the British pound.
US Economic Data:

Initial Jobless Claims: The actual value was 227,000, slightly lower than the expected 235,000, indicating continued tightness in the US labor market.
Retail Sales Monthly Rate: The actual value was 1%, far above the expected 0.3%, reflecting strong growth in US consumer spending.
Philadelphia Fed Manufacturing Index: The index unexpectedly fell to -7, much lower than the expected 6, highlighting increasing challenges in the US manufacturing sector.
Today’s Focus

UK:

July Adjusted Retail Sales Monthly Rate: The market expects a 0.5% increase, a significant improvement compared to the previous -1.20%. If the actual value exceeds expectations, it will further strengthen the British pound.
US:

August One-Year Inflation Rate Preliminary Estimate: The forecast remains unchanged at 2.90%. This will influence market expectations for future Fed policy.
August University of Michigan Consumer Sentiment Index Preliminary Estimate: Expected to rise slightly to 66.9. If the actual value exceeds expectations, it may provide support for the US dollar.
Technical Analysis

GBP/USD is currently positioned above the resistance level of 1.2850. Yesterday's gains have consolidated the upward momentum of the pound. If today's UK retail sales data is strong, GBP/USD could continue to break through the current resistance level and test the 1.2900 threshold.

Support Level: 1.2850
Resistance Levels: 1.2900, 1.2950
If the price can hold above 1.2850, the market may see further gains. Conversely, if the pound fails to break through 1.2900, the price may retreat to around 1.2800 as it seeks support.

Summary and Outlook

Based on yesterday's data and today's expectations, there is a high probability that GBP/USD will continue to strengthen, particularly if UK retail sales data performs well. On the US side, the performance of inflation expectations and consumer sentiment data will have a significant impact on the dollar's movement. In the short term, investors should pay attention to the price action in the 1.2850-1.2900 range and be cautious of potential volatility.

It is recommended that traders remain on the sidelines and wait for the data releases before deciding on entry points. Current market sentiment is relatively optimistic, but it is still necessary to be cautious of a possible dollar rebound due to unexpectedly strong US data.