GBPUSD trading 0.13% higher recovering some of yesterday’s losses after UK Services PMI came in at 50, topping forecasts of 49.7 in October and above the previous reading of 49.5. The services sector in UK is the biggest contributor to GDP and the 50 print today indicates that the services sector has turned the momentum to positive and in the upcoming months might break above 50 that will signal expansion for the sector.
USD is under pressure after Fed cut its benchmark rate for the third time this year by 25 bps to 1.50 per cent – 1.75 per cent. The factory activity in China expanded at its fastest pace since February 2017 as the Caixin Manufacturing PMI came in at 51.7, topping expectations of 51 in October and 51.4 reading in September. Traders await the UK manufacturing data and the US non-farm payrolls figures.
Later today, the US ISM non-manufacturing PMI might add some volatility and create some trading opportunities for the pair.
Mixed headlines crossing the wires around the Brexit increases Sterling volatility as UK heads for the general election in December.
GBPUSD Resistance and Support Levels
GBPUSD outlook is positive despite the recent corection. On the upside, first resistance can be found at 1.2905 the daily high, after that next target stands at 1.2999 the high from October 22nd, with more offers to come probably at the 1.3050 the high from mid-May 2019.
On the downside, immediate support level for GBPUSD stands at 1.2875 daily low and then at 1.2806 the low from October 29th, before a move down to 1.2708 the 200-day moving average. Now bulls need to break above 1.30; a convincing break above will attract more buyers, while a rejection at that level might signal profit-taking for one more time.