GBP/USD remains capped below 1.2800 following mixed UK data
- Pound rally has stalled right below 1.2800.
- Upbeat UK services activity data has provided a fresh boost to the pair.
- GBP/USD is unlikely to rally much further – Nomura.
The Sterling bounced higher following the release of the UK S&P Global/CIPS PMI figures on Friday although it remains unable to find a meaningful acceptance in the 1.2800 area.
Data released earlier today showed a strong improvement in services activity in December. The 52.7 flash PMI beat expectations of a 51.0 reading an marks the best performance of the last five months.
On the other hand, manufacturing activity revealed a deeper contraction, retreating to 46.4 from 47.2 in November, against the market consensus of a 47.5 reading.
GBP/USD further appreciation will be modest – Nomura
Looking forward, the Technical Analysis team at Nomura Bank are sceptical about the pair’s upside scope: “We do not expect economic growth in the UK for the next few quarters to be as resilient as in the US, and as a result, sluggish growth in the UK is likely to be a drag on GBP. Therefore, on net, we think the rise in GBP/USD will be modest, and expect 1.27 and 1.28 in Q1 and Q2 2024, respectively.”
Technical levels to watch
Author
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
