- British businesses in the dominant service sector reported the strongest new business growth in a year.
- UK’s Services Purchasing Managers’ Index (PMI) final reading was above the 50-mark.
- A rising pile of poor economic data in the US has raised recession concerns.
Today’s GBP/USD outlook is bullish. Despite a decline on Thursday due to a stronger dollar, the pound was still near its 10-month high as the UK economy performed better.
–Are you interested in learning more about managed forex accounts? Check our detailed guide-
According to an industry survey, British businesses in the dominant service sector reported the strongest new business growth in a year and the best export performance since at least 2014 in March. This suggests that the country’s economy will likely have expanded in the first quarter of 2023.
The S&P Global/CIPS UK Services Purchasing Managers’ Index final reading of 52.9 was below February’s 53.5 but above the 50 thresholds. It indicated growth for a second consecutive month, adding to the signs of economic recovery.
Britain’s economy has recovered from the “mini-budget” disaster brought on by Liz Truss’s unfunded tax cut plans.
The PMI indicated that business expectations had increased for a fifth consecutive month, and business outlook had attracted the most optimism since March last year.
Some businesses were, however, concerned about the increase in interest rates brought on by the Bank of England and finance minister Jeremy Hunt’s company tax increases.
A rising pile of unfavorable economic data in the US has raised concerns that the Federal Reserve’s recent rate increases may have put the country’s economy at risk of recession. For this reason, the dollar rose on Thursday as it regained its safe-haven appeal ahead of the nonfarm payroll data.
GBP/USD key events today
More PMI data will focus on the construction sector in the UK. Investors will also pay attention to the initial jobless claims report from the US.
GBP/USD technical outlook: Bulls to crack 1.2500
The 4-hour chart shows GBP/USD pulling back after failing to go above the 1.2500 key psychological level. The price is above the 30-SMA, and the RSI is above 50, showing the bullish trend is still intact.
–Are you interested in learning more about crypto brokers? Check our detailed guide-
The bears have not shown much strength in the pullback, allowing bulls to return stronger. The uptrend will continue if the price takes out the 1.2500 resistance level. Otherwise, we might see a period of consolidation below 1.2500.
Looking to trade forex now? Invest at eToro!
68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money
Share
Saqib Iqbal
