Photo by Colin Watts on Unsplash 
 

• GBP/USD gained ground on Tuesday, climbing after a one-two punch of UK labor data and US inflation.
• Wednesday is a thin showing on the economic data docket.
• Thursday returns with another double-header of UK and US data releases.

GBP/USD gained ground on Tuesday, climbing around one-half of one percent after economic releases from both the United Kingdom (UK) and the United States (US) tilted the scales in favor of the Pound Sterling (GBP) over the US Dollar (USD).

UK labor data broadly came in better than expected, with the number of new unemployment benefits seekers declining by 6.2K versus the expected 20.8K addition. Average Earnings also rose slower than expected, helping to trim the top off of inflation expectations. On the US side, Consumer Price Index (CPI) inflation data from July showed a complete lack of improvement, but still came in cool enough to keep market expectations of a September interest rate cut on the rails.

Wednesday brings a lull to the economic calendar, with little of note on the data docket. Thursday will see another round of double-header UK/US economic releases, starting with quarterly UK Gross Domestic Product (GDP) growth. UK GDP growth is expected to slow in the second quarter to just 0.1% QoQ, bringing the annualized figure down to 1.0% from 1.3%.

Thursday’s data docket on the US side of the Atlantic will the next round of weekly Initial Jobless Claims, but the key US datapoint will be Producer Price Index (PPI) inflation. Annualized PPI inflation is expected to rise to 2.9% YoY from 2.6%.
 

GBP/USD price forecast
 

Cable’s bullish extension on Tuesday has bolstered GBP/USD bids back above the 50-day Exponential Moving Average (EMA) near 1.3430, sending intraday price action back above the 1.3500 handle for the first time in three weeks. GBP/USD buyers are continuing to pare back losses from the latest swing low, but the last swing high into the 1.3600 region still lies ahead as a technical ceiling.

GBP/USD daily chart
 

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