UK Services PMI Shines: 60.2 – GBP/USD Extends Gains

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UK Services PMI jumped to 60.2 points in July 2013, reflecting very strong growth. This is the highest levels since December 2006. It was expected to rise from 56.9 to 57.4 points. 50 points separate contraction and growth.The last and most important purchasing managers’ index joins the manufacturing and construction figures, which both showed solid growth.

GBP/USD began the week on a positive note, climbing above 1.53 up to 1.5330. The US dollar is weaker across the board. After the publication, cable is extending its gains to 1.5350. EUR/GBP is down to 0.8657. The pound was certainly “front running” the data. Expectations were very high, or perhaps there was a leak.

The UK economy grew nicely in Q2: 0.6%. Also other figures such as retail sales and home prices are on the rise. However, the central bank doesn’t want markets to price in a rate hike too early. Carney has already sent the pound crashing in his first rate statement. More fireworks are expected on Wednesday, when the Bank of England will release the highly anticipated Inflation Report, which is expected to include forward guidance.

And before the inflation report, we have the important manufacturing figures.

See how to trade the UK Manufacturing Production with GBP/USD.

The obvious resistance level for GBP/USD is 1.54 – a line the pair failed to conquer several times recently. Support is at 1.5310.

Will this good data, the strongest level of activity seen in the most important sector in 6.5 years be reflected in a stronger pound?

For more, see the British pound forecast.

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About Author

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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