The third and last purchasing managers’ index in the UK is the most important one, and it also exceeded expectations. Services PMI ticked up from 60.2 to 60.5 points, beating expectations for a slide to 59 points. This joins the previous shiny numbers.
GBP/USD finally made a convincing break above 1.56. Can it hold on to this level?
A score of 60 points reflects strong and impressive growth. Also the forward looking new orders number is at 61.3 points, the highest in 16 years. Markit noted that the recovery of this sector “has legs”.
The manufacturing sector is also growing nicely and construction is on a roll. These fresh figures for August join the stellar growth in Q2 and help the pound gain. The rise of the pound is more evident against the euro, with EUR/GBP dipping below 0.8450.
However, the battle with the greenback is harder, and cable found it hard to attack the 1.5710 line which capped it twice. This is the really critical resistance.
After climbing to 1.5630, GBP/USD dropped back. At the time of writing, it is holding on to 1.56, but as aforementioned, not moving towards critical resistance. What’s next for cable?
Further reading: GBPUSD forecast.
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