GBP/USD Outlook Ahead of UK Manufacturing PMI Data

Summary:

The GBP/USD is likely to continue soaring today as traders react to the UK manufacturing PMI data. The pair will likely reach the important level of 1.34

The GBP/USD price is holding steady ahead of the important UK manufacturing PMI and Nationwide House Price Index (HPI). It is trading at 1.3366, higher than yesterday’s low of 1.3305.

Markit, the data company, will release the UK manufacturing PMI data at 09:30 GMT today. These numbers will provide a picture about the state of manufacturing in the country.

Analysts, using the previous guidance of the flash PMIs, believe that the number will remain above 50 for the sixth consecutive month in a row. However, it is worth noting that the manufacturing sector in the UK is relatively small compared to the services industry.

The GBP/USD will also react to the house price index data from Nationwide. Analysts believe that the index will show that the index rose by 5.5% in November. These numbers will come a day after the Bank of England released weak mortgage data, which is a sign that the housing market has started to cool down.

GBP/USD technical outlook

Turning to the four-hour chart, we see that the GBP/USD pair has soared by more than 5% since September. The pair is trading at 1.3366, which is higher than last week’s low of 1.3290. The price has also found a strong resistance at 1.3396 and is slightly above the 25-day moving average.

Also, the GBP/USD is above the ascending black trendline that connects the lowest levels in November. Therefore, I believe that the upward trend will continue today as bulls aim for the important resistance at 1.3396. This trend will be invalidated if the price moves below the black upward trendline.