GBP is rising steadily against other major rivals as market players seemed to trade with caution ahead of Thursday’s PMI data release, along with the US employment release scheduled on Friday.
An analyst at Societe Generale Kit Juckes noted that month-end hovers and with Friday’s non-farm payrolls, which appeared to follow on hard behind. In addition, it is expected to witness a reflective mood instead of a dramatic action.
With the approaching UK economic data release, it had provided a windfall to Sterling and a bullish trend in GBP is expected to weaken on Thursday.
UK Data Could Boost Sterling
After weeks of confident trading, all eyes are back in the major event coming next week.
Market players are eager to clarify as to whether the better-than-forecast run of economic data release from August would still support the Pound to extend the bullish trend, which was witnessed from a low of 1.1461 in early August to last week’s best at 1.1784.
Investors will closely watch on Thursday’s Manufacturing PMI data release, and Friday’s Construction PMI.
Consequently, investors issued selling position for Sterling as they are expecting a more cautious standpoint ahead of the upcoming releases, which make sure of the currency to retain a soft bias in the next few days.
A sharp decline was seen on the equivalent July PMI data in contraction territory in the two sectors, citing mounting worries over the impact of Brexit, while the August data is anticipated to endure a soaring trend.
UK Services PMI Release February 2015
The chart below illustrates the GBPUSD pair reaction in the previous release of the UK Services PMI data, in which the currency pair opened at 1.50362 before the scheduled release and tried to break out on the upside at resistance 1.50708.
On the day of the PMI release (February 4), the candle rallied, which remained steady at resistance 1.52063 and support 1.50708. Thus, pair soared once more amid the next session and opened higher at 1.54131.
Further, the currency pair continued with an upward trend with mixed trading positions, and reached a peak level of 1.55261 at the close on February 25.
UK Services PMI Release October 2015
Markit released the UK Services PMI index in October last year, in which the basis of the survey is mainly from the purchasing managers across the UK relative to the economic situation and current business.
The PMI index for the services sector is based on five main indicators and includes production, product availability, shipping activity, number orders and labor amount.
As shown in the chart below, the currency pair opened higher at 1.51251, which showed an upward trend at resistance 1.52444 and support 1.51107. On the day of the Services PMI release, the pair slightly declined at 1.51444 in late trade, but continued rallying at 1.54755 session high.
Given a consolidating movement of the GBP/USD pair, the price is expected to post higher as shown in the above illustrations that the previous PMI releases of the pair showed a significant rally. In addition, GBP is highly affected in every PMI data release, therefore we conclude that prices are expose for an increase.
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