GBP/USD surges to fresh 2-week tops, around mid-1.3100s

GBP/USD rallied amid signs of recovery in the UK manufacturing sector.
A modest USD pullback remained supportive of the strong momentum.
Technical buying above the 1.3100 mark provided an additional boost.

Haresh Menghani FXStreet

The GBP/USD pair continued scaling higher through the early North-American session and climbed to fresh two-week tops, around mid-1.3100s in the last hour.

Following a brief consolidation through the early part of Wednesday's trading session, the pair caught some aggressive bids after the latest CBI report showed that the UK manufacturing sector started the year on a strong footing.

Adding to this, the Quarterly Business Situation Index – the gauge of optimism in the manufacturing sector – rebounded sharply to +23 in January from -44 in October and marked its highest level since April 2014.

The data added to the latest optimism led by Tuesday's stronger-than-expected UK wage growth figures and forced investors to temper expectations for an imminent interest rate cut by the Bank of England at its upcoming meeting on January 30.

This resulted into some aggressive intraday short-covering move, which took along some near-term trading stops being placed near the 1.3100 round-figure mark and further accelerated the intraday positive movement amid a modest US dollar pullback.

With Wednesday's strong move up, the pair finally seems to have confirmed a near-term bullish breakthrough a three-week-old descending trend-channel. Hence, some follow-through strength, possibly beyond the 1.3200 handle, now looks a distinct possibility.

Technical levels to watch

GBP/USD

Overview
Today last price	1.3148
Today Daily Change	0.0104
Today Daily Change %	0.80
Today daily open	1.3044

Trends
Daily SMA20	1.3077
Daily SMA50	1.3042
Daily SMA100	1.2814
Daily SMA200	1.269

Levels
Previous Daily High	1.3084
Previous Daily Low	1.2995
Previous Weekly High	1.312
Previous Weekly Low	1.2954
Previous Monthly High	1.3515
Previous Monthly Low	1.2896
Daily Fibonacci 38.2%	1.305
Daily Fibonacci 61.8%	1.3029
Daily Pivot Point S1	1.2998
Daily Pivot Point S2	1.2952
Daily Pivot Point S3	1.2909
Daily Pivot Point R1	1.3087
Daily Pivot Point R2	1.313
Daily Pivot Point R3	1.3176

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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