Key Highlights
- The British Pound started a nice uptrend from well below 1.3100 against the US Dollar.
- The GBP/USD pair surged higher recently and broke two important bearish trend lines at 1.3250 on the 4-hours chart.
- UK’s Manufacturing PMI in Oct 2017 rose from the last reading of 55.9 to 56.3.
- Today, the BOE’s interest rate decision is scheduled and the central bank is likely to raise rates from 0.25% to 0.50%.
GBPUSD Technical Analysis
The British Pound traded below the 1.3100 support on Oct 27, 2017 against the US Dollar. Later, the GBP/USD pair formed a solid support, started an uptrend and moved above 1.3200.
During the upside move, the pair was successful in breaking two important bearish trend lines at 1.3250 on the 4-hours chart. The pair also settled above the 100 simple moving average (H4, red), currently at 1.3210.
At present, the pair is struggling to settle above the 200 simple moving average (H4, green) at 1.3300. Should there be a close above 1.3300, there can be an upside drift towards the 1.3350 and 1.3400 levels.
On the downside, the broken resistance at 1.3250 may now act as a decent support if the pair corrects lower from the current levels.
UK Manufacturing PMI
Recently in the UK, the Manufacturing Purchasing Managers Index (PMI) for Oct 2017 was released by both the Chartered Institute of Purchasing & Supply and the Markit Economics. The forecast was lined up for a minor decline from the last reading of 55.9 to 55.8.
The actual result was better than the forecast, as the UK’s Manufacturing posted an increase from 55.9 to 56.3. According to the report, both output and new order growth remain solid.
Commenting on the release, the Director at IHS Markit, Rob Dobson, stated:
UK manufacturing made an impressive start to the final quarter of 2017 as increased inflows of new work encouraged firms to ramp up production once again. The sector looks to be achieving a quarterly rate of expansion close to 1%, therefore sustaining the solid pace of growth signalled by the official ONS estimate for the third quarter.
Overall, the GBP/USD pair remains in an uptrend and if the BOE decides to increase rates in today’s decision, there can be more upsides toward 1.3350-1.3400.
Economic Releases to Watch Today
BoE Interest Rate Decision – Forecast 0.50%, versus 0.25% previous.
Germany’s Unemployment Change for Oct 2017 – Forecast -11K, versus -23K previous.
Germany’s Unemployment Rate for Oct 2017 – Forecast 5.6%, versus 5.6% previous.
Euro Zone Manufacturing PMI for Oct 2017 – Forecast 58.6, versus 58.6 previous.
Germany’s Manufacturing PMI for Oct 2017 – Forecast 60.5, versus 60.5 previous.
Spanish Manufacturing PMI for Oct 2017 – Forecast 54.9, versus 54.3 previous.
France Manufacturing PMI for Oct 2017 – Forecast 56.7, versus 56.7 previous.
Italian Manufacturing PMI for Oct 2017 – Forecast 56.8, versus 56.3 previous.
US Initial Jobless Claims – Forecast 235K, versus 233K previous.
