- British Pound took advantage of selling pressure on the US Dollar and traded higher.
- The GBPUSD pair is heading towards a monster resistance area of 1.4800-20 where sellers are likely to appear.
- In the UK, the Manufacturing Purchasing Managers Index (PMI) released by both the Chartered Institute of Purchasing & Supply and the Markit Economics posted a decline from 52.7 to 51.9 in December 2015.
- UK Consumer Credit released by the Bank of England increased from the last revised reading of £1.207B to £1.467B in November 2015.
The GBPUSD pair after a sharp decline towards the 1.4700 level found support and currently correcting higher. It managed to clear the 50% Fib retracement level of the last drop from the 1.4841 high to 1.4694 low.
However, there is a monster trend line and resistance zone forming near 1.4800-20 that may stall gains. Moreover, the 100 and 200 hourly simple moving averages are also waiting on the upside to act as a barrier.
On the downside, the 1.4760 levels can be seen as a support area, followed by 1.4740.
UK Manufacturing PMI
Today, there were a couple of economic releases in the UK including the Manufacturing Purchasing Managers Index (PMI), which captures business conditions in the manufacturing sector was reported by both the Chartered Institute of Purchasing & Supply and the Markit Economics. The forecast was lined up for no change in the Manufacturing PMI from 52.7 in December 2015. However, the result missed the mark, as there was a decline from the last reading of 52.7 to 51.9.
The report stated that “Over the final quarter as a whole, the average readings for the headline PMI, Output Index, New Orders Index, New Export Orders Index and Employment Index were all above their respective averages”.
The GBPUSD is showing a lot of positive signs, but no doubt the highlighted trend line and resistance area is very important moving ahead.