GBPUSD Movement
For the 24 hours to 23:00 GMT, the GBP rose 0.11% against the USD and closed at 1.6880, following upbeat UK services PMI.
The UK Markit services PMI jumped surprisingly to an 8-month high reading of 59.1 in July from a reading of 57.7 in June, beating the market forecast of 57.9. Moreover, The Markit composite PMI also unexpectedly rose to 58.8 in July from 58.0 in June.
Meanwhile, the BoE’s chief economist Andy Haldane stated that frequent regulatory intervention needs to become the rule to curb the financial risks arising out from non-banking sectors like mutual funds, insurance companies and pension funds. Elsewhere, the credit rating agency Moody has downgraded the UK banking system from ‘stable’ to ‘negative’.
Also, Leading think tank, NIESR projected the UK economy to grow 3.0% in 2014, up from its previous forecast of 2.9%, thereby indicating that the economy is firmly recovering.
In the Asian session, at GMT0300, the pair is trading at 1.6876, with the GBP trading marginally lower from yesterday’s close.
Early this morning, the British Retail Consortium (BRC) reported that the shop price index in the UK eased 1.9% in July, on an annual basis, following a fall of 1.8% recorded in the preceding month. Markets were expecting the index to fall 1.6% in July.
The pair has its first short term resistance at x.xxxx, followed by the next resistance at x.xxxx. The first support is at x.xxxx, with the subsequent support at x.xxxx. The pair is expected to find support at 1.6851, and a fall through could take it to the next support level of 1.6825. The pair is expected to find its first resistance at 1.6896, and a rise through could take it to the next resistance level of 1.6915.
The NIESR GDP estimate for the three months to July June industrial output, due later in the day, are the crucial indicators from UK ahead of the BoE’s 7 August policy review.
The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.
