Surprise Surge in UK House Prices Boosts Sterling: GBP Forecast

GBP Forecast Brightens as UK House Prices Unexpectedly Soar, Boosting Sterling. Key Resistance and Support Levels Analyzed for Traders.

The British pound is finding a glimmer of support amid recent challenges, as indicated by current market analysis, with the UK House Price Index registering a surprising rise for the second consecutive month.

The GBP/USD currency pair shows signs of stabilization as housing prices in the UK exceeded expectations. Month-over-month, as indicated by the economic calendar. While foreign exchange markets remain relatively subdued, traders closely monitor tomorrow’s upcoming Non-Farm Payroll (NFP) report. This influential economic indicator is poised to shape the near-term direction of the pound.

Surprise Surge in UK House Prices Boosts Sterling: GBP Forecast

Yesterday’s weak UK construction Purchasing Managers’ Index (PMI) figures and the minimal impact from Bank of England (BoE) Governor Andrew Bailey have, consequently, shifted market attention across the Atlantic, focusing on critical data releases from the United States.

Later today, the spotlight will be on jobless claims data, particularly initial jobless claims as an indicator of new or emerging unemployment, despite the recent miss in the ADP employment change figures. The market is cautiously optimistic, considering its historical divergence from the NFP numbers.

Money markets have actively repriced the Bank of England’s monetary policy stance as ‘dovish.’ These forthcoming data points will significantly determine future pricing trends. Only the UK GDP and jobs reports are pending before the following rate announcement.

GBP/USD price action is approaching a crucial juncture, with critical support identified at the psychological handle of 1.2500 and the 200-day moving average. Moreover, the Relative Strength Index (RSI) suggests the pair is coming off overbought territory, contributing to the current hesitancy in the market. Tomorrow’s NFP report will actively shape the short-term directional bias, with expectations for an increase that could potentially extend the recent downside for the cable.

Key Resistance Levels

• 1.2900
• 1.2848
• 1.2746

Key Support Levels

• 1.2500
• 200-day MA
• 1.2400

BEARISH IG CLIENT SENTIMENT (GBP/USD)

IG Client Sentiment Data (IGCS) reveals that retail traders are currently net SHORT on GBP/USD, with 51% of traders holding short positions as of the latest data. Market participants closely monitor these sentiment dynamics amid the evolving landscape of economic indicators.

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