Search ForexCrunch

GBP/USD continues to trade higher and was within only 15 pips of the round 1.60 resistance line before retreating a big. Will it make the break?

Better than expected manufacturing production and also producer prices pushed the pair higher.

GBP/USD Chart September 7 2012
GBP/USD Close to 1.60 – Click image to enlarge

Manufacturing production surprised with a rise of 3.2%, better than 2.1% that was predicted. It counters a plunge of 2.9% last month in this important yet volatile indicator.

Industrial production also surprised to the upside: a gain of 2.9% instead of 1.6% estimated. PPI Input rose by 2%, more than 1.6% that was predicted, and PPI Output also exceeded expectations with a rise of 0.5% instead of 0.2%.

Cable broke above 1.5910 that capped it for some time after the good news from Europe. Mario Draghi laid out concrete plans for buying bonds en masse and provided hope for stability in the euro-zone and especially in Spain.

Earlier this week, the UK saw better than expected data in most cases, with PMI rising nicely in the most important sector: services.

For more on the pound, the see the GBP to USD forecast.