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"Clearly this PMI number is significant as it will give a steer as to whether the disconnect between the survey data and the official data is as wide as has been assumed recently."
- CIBC (based on Reuters)
Industry outlook
GBP/USD is still trading above the 1.6200 level—the highest level since 2008—though it declined yesterday after the US ISM Manufacturing PMI data release. This short-term correction could pull the pair back at least to the 1.6180/1.6150 levels. Stiil, from the fundamental point of view, the British pound has no basis for keeping such a strong value compared to the US dollar.
Traders' sentiment
According to SWFX sentiment index, GBP/USD is currently overbought (70.99%), thus increasing the possibility of the pair moving south, given that those who stayed long on the Cable start closing their positions.
Long position opened
The initial resistance level for intraday trading is 1.6249. Bulls might establish additional targets at 1.6279 and 1.6310 if the Sterling appreciates more.
Short position opened
Largest investors might have placed their take profit orders at the key support levels. These levels for intraday trading are situated at 1.6188, 1.6157 and 1.6127.
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