- British Pound after tumbling below 1.4200 against the US dollar found buyers for another ride higher.
- The GBPUSD pair spiked sharply, and managed to clear the 50 simple moving average on the 4-hours chart.
- UK Manufacturing Purchasing Managers Index (PMI) released by both the Chartered Institute of Purchasing & Supply and the Markit Economics posted an increase from the last reading of 52.1 to 52.9 in Jan 2016.
- It looks like the GBPUSD pair may continue trading higher moving ahead and might even break the 100 simple moving average on the 4-hours chart.
The British Pound managed to climb higher successfully against the US dollar after testing the 1.5150 levels. Buyers even managed to take the GBPUSD pair above the 50 simple moving average on the 4-hours chart.
It is now facing resistance near the 61.8% Fib retracement level of the last drop from the 1.4416 high to 1.4151 low, which is also coinciding with the 100 simple moving average (H4).
A break above the highlighted confluence area may call for more gains moving ahead.
UK Manufacturing PMI
Today, the UK Manufacturing Purchasing Managers Index (PMI), which captures business conditions in the manufacturing sector was released by both the Chartered Institute of Purchasing & Supply and the Markit Economics. The market was expecting a minor decline from the last reading, but the outcome was positive. There was an increase from the last revised reading of 52.1 to 52.9 in January 2016.
The report stated that “Manufacturing production increased again during January, reflecting improved inflows of new work from the domestic market. Moreover, the rate of expansion in output accelerated to a 19-month high. The trend in new export orders, however, fell back into decline“.
Overall, it looks like the GBPUSD may head higher and challenge sellers near the 1.4380 area.