GBP/USD hits ten-week high due to positive UK PMIs

GBP/USD sustains rise above 1.2500, in a market quieted by US Thanksgiving holiday.
UK's economic recovery signals boost GBP, with Services and Composite PMIs expanding and Manufacturing PMI outperforming expectations.
The UK's long-term economic outlook remains cautious, with potential BoE rate hikes looming.

Christian Borjon Valencia FXStreet

The Pound Sterling (GBP) gets some relief and advances against the US Dollar (USD) in thin trading due to US markets being closed during Thanksgiving. Nevertheless, the GBP/USD has risen to a ten-week high and trades above the 1.2500 figure for the fourth consecutive day.

Pound Sterling gains against the Dollar, supported by improved business activity and inflation drop in the UK

GBP/USD’s advance is courtesy of positive economic data in the UK. Business activity in the UK recovered some ground, as S&P Global revealed that Services and the Composite PMIs expanded after staying at contractionary territory after three months of contraction. Although the Manufacturing PMI remained below the 50 thresholds of contraction/expansion, it grew from 44.8 to 46.7, exceeding forecasts of 45.

According to S&P Economic Director Tim Moore, the drop in headline inflation was the main driver of supporting business activity. The latest UK inflation report witnessed the CPI plunging from 6.7% to 4.6%, while the economy dodged a recession, with GDP standing at 0%.

Nevertheless, the economic outlook for the UK remains weak, as data projects a recession. Recent hawkish comments by the Bank of England (BoE) Governor Andrew Bailey emphasized that rates must be higher for longer, which could weigh on the economy.

GBP/USD Price Analysis: Technical outlook

The GBP/USD daily chart portrays the pair as remaining in an uptrend during the week, though after hitting a new weekly high of 1.2569, it gave back some gains and retraced below the 1.2550 mark. For a bullish continuation, buyers need to lift the exchange rates above the November 22 daily open at 1.2537 so they can remain hopeful of testing the 1.2600 mark. Failure to do it, the GBP/USD could dive to 1.2500, which, once surrendered, would expose the 200-day moving average (DMA) at 1.2451.

GBP/USD

Overview
Today last price	1.2532
Today Daily Change	0.0036
Today Daily Change %	0.29
Today daily open	1.2496

Trends
Daily SMA20	1.2313
Daily SMA50	1.2257
Daily SMA100	1.2503
Daily SMA200	1.245

Levels
Previous Daily High	1.255
Previous Daily Low	1.2449
Previous Weekly High	1.2506
Previous Weekly Low	1.2213
Previous Monthly High	1.2337
Previous Monthly Low	1.2037
Daily Fibonacci 38.2%	1.2488
Daily Fibonacci 61.8%	1.2511
Daily Pivot Point S1	1.2447
Daily Pivot Point S2	1.2398
Daily Pivot Point S3	1.2346
Daily Pivot Point R1	1.2547
Daily Pivot Point R2	1.2598
Daily Pivot Point R3	1.2647

Author

Christian Borjon Valencia

FXStreet

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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