GBP/USD – Services PMI Jumps, But Pound Shrugs

GBP/USD is trading sideways on Wednesday. The pair is currently trading at 1.3032, up 0.02% on the day.

Is the British Economy On Path of Recovery?

It has been a week of positives from December British PMIs, which are key gauges of the health of the economy. On Thursday, Services PMI climbed to 53.9, up sharply from 50.0 a month earlier. This beat the estimate of 52.9 and was the strongest reading since September 2018. The reading follows acceleration in manufacturing and construction. Manufacturing PMI improved to 50.0 in January, up from 47.5 a month earlier. This marked the first time that the index has not been in contraction mode since April. Construction PMI rose to 48.4, its highest reading since May. If the next PMI reports continue to point upwards, it would indicate improvement in the British economy, which could lift the pound.

Technical Analysis

GBP/USD continues to battle with the 1.30 line. Currently, this key level is a weak resistance level. Above, we find resistance at 1.3075. On the downside, there is support at 1.2902, followed by a support level at 1.2850.

Pacific Currencies – Daily Summary

USD/CNY

The Chinese yuan has gained ground over the past two sessions, but is trading sideways on Thursday. Currently, the pair is trading at 6.9731, up 0.02% on the day. There are no Chinese events on the schedule. Traders should pay attention to a significant development on the technical side, as the 50-day EMA and 200-day EMA lines have both hit the daily candlestick and in close proximity.

AUD/USD

AUD/USD has gained ground this week, and looks to be on its way to its first winning week of the year. Currently, the pair is trading at 0.6750, down 0.01% on the day. In economic news, Australian data was soft. Retail sales declined by 0.5% in December, down from 0.9% a month earlier. It was the weakest reading since December 2017. As well, Australia’s trade surplus narrowed to A$5.22 billion, missing the estimate of A$5.65 billion. On Friday, the RBA releases its quarterly monetary policy statement.

NZD/USD

NZD/USD is almost unchanged in Thursday trade. Currently, the pair is trading at 0.6470, down 0.05% on the day. In economic news, ANZ Commodity Prices fell 0.9% in January, marking a second successive decline. Later in the day, New Zealand releases Inflation Expectations, which has slowed for five consecutive quarters. The third-quarter reading was 1.8 percent.