GBP/USD Breaks Higher on Better Services PMI

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Finally some good news from Britain: the services sector, which is the most important one, has shown significant signs of growth in July, with Services PMI jumping to 55.4 points. This is much higher than 55.3 that was expected. GBP/USD breaks higher.

Pound/dollar is now trading at 1.6363, up from resistance at around 1.63 before the release. Yet again, the move began just before 8:30 GMT – was it leaked once again?

The manufacturing sector in Britain fell to contraction in July. The purchasing managers’ index for this sector dropped below the 50 point mark for the first time in a long time. On the other hand, the construction sector was OK,  meeting expectations and scoring 53.5 points.

All in all, despite the improved PMI in the services sector, a rate hike isn’t likely anytime soon. The overall situation remains weak.

But as the whole world is slowing down, this positive number from Britain helps it outshine other currencies. Britain isn’t experiencing a bond market crash like many countries in Europe, and wasn’t close to a default like the US.

Resistance appears at 1.6470, followed by 1.6550. Support is at 1.6280 – 1.63, followed by 1.62.

For more on GBP/USD, see the Pound/dollar forecast.

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Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

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