The PMI for the British services sector surprised many experts, who did not expect any significant change in March. According to IHS Markit, the PMI soared to 55.0 while analysts forecasted only a minor increase to 53.5. Thus, the PMI remained above the no-change value for the eighth consecutive month. This result showed that activity in the British services sector rebounded from five-month lows registered in the previous month. In March, business activity and new work creation grew at the fastest pace this year, so far. According to Markit, it was attributable to greater customers' demand and favourable economic conditions, such as the weak Pound. In fact, especially high demand on British services was recorded in the United States. The overall sentiment about business prospects among the surveyed companies remained positive. Thus, half of the respondents believed that their business activity would improve in the year-ahead. However, some companies continued to complain about the Brexit-related anxiety, which precluded investment inflows.
Moreover, average prices charged by service providers increased at the highest rate since 2008, as input costs surged markedly in the recent months. In addition, experts also recorded the weakest job creation since August 2016.
US NFP is the main event today
GBP/USD: all signs point to the upside
The US Dollar managed to outperform the British currency, but failed to carry out the anticipated retest of the support cluster around 1.2420. With today's US NFP data being the main market mover, the Cable has the opportunity to reconfirm the bearish trend-line at 1.2549 and possibly even pierce it should the employment figures disappoint. Technical indicators are also in favour of the positive outcome; however, we should not rule out the possibility of the NFP data surprising to the upside, in which case the substantial demand area circa 1.2420 could easily be pierced.
Daily chart
- Hourly chart
Traders mostly bullish
For the fifth consecutive day market sentiment improved, as now 59% of all open positions are long. Meanwhile, all pending orders are equally divided between the buy and the sell ones.
A less optimistic situation is observed elsewhere. The sentiment at OANDA is still neutral, but with bears outnumbering the bulls, namely 48% of all open positions are long and the remaining 52% are short. Meanwhile, sentiment at Saxo Bank improved over the day, with 60% of traders now being long and the other 40% being short the Sterling against the US Dollar.
Spreads (avg, pip) / Trading volume / Volatility
Traders still indecisive
By the end of the next three months traders believe the Cable is to rise above the 1.22 major level, as 53% of survey participants believe so. While the current price is around 1.25, the average forecast for July 07 is 1.2358. The 1.18-1.20 and the 1.30-1.32 ranges are now the most popular price intervals, having 15% of the votes each, while on the second place are the 1.20-1.22 and the 1.26-1.28 price ranges, with 10% of poll participants choosing each of them.