In the UK, the PMI service released by both the Chartered Institute of Purchasing & Supply and the Markit Economics posted a positive reading in August 2016.
GBP/USD Technical Analysis (6th September 2016)
The British Pound after testing the 1.2860 support versus the US Dollar found strong bids and started moving higher. There was a nice upside thrust, taking the GBP/USD pair above a couple of important resistance levels.
First, the pair broke the 1.3000 resistance, and then managed to close above 1.3200. However, the most important thing was a close above the 100 simple moving average on the 4-hours chart.
The pair is currently trading with a positive sentiment and following an ascending channel pattern on the 4-hours chart. So, it looks like the pair may continue to move higher.
Buy Idea – Buying dips in the GBP/USD pair can be considered as long as the pair is above the 1.3150 support.
UK Services PMI
Recently in the UK, the service PMI figure was released by both the Chartered Institute of Purchasing & Supply and the Markit Economics.
The UK services PMI is a major indicator of the economic situation in the services sector and was forecasted to increase from 47.4 to 50.0 in August 2016.
However, the outcome was positive, as the UK services PMI posted a solid expansion reading of 52.9 in August 2016. Obviously, the report was encouraging and lifted the market sentiment. The Chief Business Economist at IHS Markit, Chris Williamson, stated that “A record rise in the services PMI adds to the encouraging news seen in the manufacturing and construction sectors in August to suggest that an imminent recession will be avoided“.
In short, there are enough bullish signs for the British Pound, and it may keep it in the uptrend for some time unless there is some bad news in the UK.