GBPUSD British Pound Once again at Brink
- British Pound At 09:40 GMT, the pair is trading at 1.3240, with the Pound trading 0.77% higher against US Dollar from the New York close,
- after UK’s seasonally adjusted Markit manufacturing PMI expanded in August. The pair witnessed a high of 1.3265 and a low of 1.3124 during the session. Yesterday, the Pound traded 0.4% higher against the US Dollar in the New York session and ended at 1.3139.
- Immediate downside, the first support level is seen at 1.3120, while on the upside, the first resistance level is situated at 1.3312.
GBP in the Driver’s Seat Today
GRetail FX traders are once again net-short the British Pound versus the US Dollar, and a contrarian view of ‘crowd’ sentiment points to further British Pound strength. We’re admittedly left in somewhat of a difficult position; the recent shift is not enough to completely change our longer-term bearish bias. Yet a rally above key resistance at $1.3357 would act as confirmation of a bigger trend turnaround.
It was just a week ago we made much the same claim and yet the GBP turned lower, and we can’t rule out a similar fake-out this time around. We would ideally see a more sustained break higher and consistent retail FX crowd selling in order to call for a true GBP/USD trend change.
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Manufacturing activity in the U.K. surprisingly jumped back into expansionary territory in August from what had been its worst level since early 2013 in the prior month, industry data showed on Thursday.
In a report, market research group Markit said that its U.K. manufacturing PMI rose to a seasonally adjusted 53.3 last month from a reading of 48.2 in July.
That was a 10-month high and the month-on-month increase in the level of the headline PMI (5.0 points) was the joint-greatest in the near 25-year survey history.
Analysts had expected the index to rise to only 49.0 in August.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
Markit indicated that the data showed solid rebounds in the trends in U.K. manufacturing output and incoming new orders, while a weaker pound drove up export orders and input costs.
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