GBP/USD price holds firm above 1.2750 as U.S. data and housing gains lift sterling
GBP/USD holds steady above 1.2750 due to robust UK housing data and cautious U.S. inflation expectations.
GBP/USD price holds firm above 1.2750 as U.S. data and housing gains lift sterlingThe British Pound (GBP) remained resilient against the U.S. Dollar (USD), holding comfortably above 1.2750 on Thursday following the release of stronger-than-expected UK housing data. The RICS House Price Balance surged to 25%, surpassing forecasts of 19% and the previous reading of 16%. This boost in housing sentiment, paired with declining 10-year UK bond yields from 4.48% to 4.33%, underscored easing borrowing costs and bolstered GBP/USD's upward momentum.
Market participants now turn their attention to upcoming economic indicators, including the NIESR GDP Estimate and CB Leading Index, which could further shape expectations for UK economic performance.
U.S. inflation data keeps USD in focus
On the U.S. side, the Bureau of Labor Statistics reported that the Consumer Price Index (CPI) and core CPI rose 0.3% month-over-month in November, matching market forecasts. Traders are now watching the Producer Price Index (PPI) and Initial Jobless Claims, with the latter expected to drop from 224,000 to 220,000. A higher-than-expected jobless claims figure could pressure the USD, providing additional support for GBP/USD.U.S. stock index futures fell between 0.2% and 0.3%, suggesting a cautious Wall Street opening that could limit GBP/USD's upside in the near term.
GBP/USD chart (Aug 2024 - Dec 2024) Source: Trading View
Technically, GBP/USD trades above critical support at the 1.2750-1.2760 range, defined by the Fibonacci 50% retracement level and the 200-period Simple Moving Average (SMA). Immediate resistance lies at 1.2800, followed by the static level of 1.2850.On the downside, initial support is seen at 1.2730, marked by the 50-period SMA, with deeper levels at 1.2700 and 1.2670, aligned with the Fibonacci 38.2% retracement and 100-period SMA, respectively.
Investors will be closely monitoring the European Central Bank’s policy announcements and any dovish surprises that could trigger capital outflows from the Euro, potentially benefiting the Pound. Additionally, key U.S. economic releases, including the PPI and Initial Jobless Claims, remain crucial drivers for the GBP/USD pair’s next move.
We have previously analyzed GBP/USD's response to key economic indicators, emphasizing its sensitivity to U.S. inflation data and UK housing market trends.
