GBP/USD - GBPUSD - 02/19/2024 (GMT)

Last week was packed in terms of data on the economic calendar for the USA and the UK which had an impact on both countries 10-year bond yields. If we take a look at the British 10 Year Gilt we will see that it is currently at around 4.1% while the U.S. 10 Year Treasury is around 4.3%. This indicates that capital is flowing slightly in favor of the US dollar rather than the British quid. Also unemployment in the United Kingdom fell by 0.1% for the month of December but what is important is that the Claimant count change, meaning the people seeking unemployment benefits, have almost tripled in January. This could be hinting that unemployment might increase in the next publication and therefore creating some downward pressure for the British pound in the medium-term outlook. 

From the technical point of view, the price has been trading in a bearish channel since the start of the year and is around the middle of the upper and lower boundaries of the current channel. The 50 day moving average is trading well above the 100 day moving average indicating that the short term direction might be bullish given that the Stochastic oscillator is not recording any extreme overbought or oversold levels. If this scenario becomes a reality then the price might retest the upper boundary of the channel at around $1.27 before correcting again to the downside.