The British pound gained ground against the US dollar after the release of Manufacturing and Services PMI data from the UK and the US. The UK showed a contraction in Manufacturing PMI after the data came out at 46; experts anticipated an expansion at 51.1. On the other hand, the Services PMI came out at 52.5, a figure better than expected by 0.5.
The US economic data had a worse than expected outcome on both Indicators, with a Manufacturing PMI of 51.3, which despite showing expansion, came short of the expected 52 figure. Moreover, the Services PMI showed a more significant contraction; data came out at 44.1 of the 49.2 expert consensus.
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The Bollinger bands are very wide, making the pair highly volatile; we will continue to see big moves in the short term for the GBPUSD. The pair is trading close to the lower band, suggesting that the price is relatively low.
The relative strength index is at 34%, and the price is recovering from an oversold status; this will allow the pair to continue climbing in short to medium term with a lot of freedom. The trend continues to be downwards as the price is currently below the short and long-term moving averages.
Our parabolic SAR indicator suggests that the price will continue to fall in the short term; we will have to wait and see how far up this retracement goes before the downtrend resumes. The release of upcoming economic data will continue to affect the exchange rate.
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