The week ended on a high note for British fundamentals. The British pound shrugged off the strong numbers, but nevertheless GBP/USD has enjoyed a strong week. The pair has climbed 1.3%, its best weekly gain since early June.
Retail sales and PMIs head higher
Retail sales, the primary gauge of consumer spending, has recovered nicely since its plunge of 18.1% back in April. The indicator climbed 12.0% in May and was even stronger in June, with a gain of 13.9%. There was more good news on the manufacturing and services fronts. The Manufacturing PMI accelerated from 52.0 to 53.6, while Services PMI rose from 51.4 to 56.6. Both readings were above the 50.0 level, which separates contraction from expansion.
The US dollar has been broadly weaker in recent weeks and the British pound has taken full advantage, with gains of 2.8% in July. Although the British economy is not in great shape, investors have not flocked to the safe-haven greenback, despite the severe global economic conditions. If upcoming British events continue to point upwards, GBP/USD could move to higher ground.
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GBP/USD Technical
GBP/USD is currently trading at 1.2758, up 0.13% on the day. The pair has shown limited movement in the Asian and European sessions
- 1.2685 is the first level of support. Below, there is support at 1.2636
- 1.2772 was tested in resistance in the Asian session. This is followed by resistance at 1.2810
- GBP/USD broke above the 200-day MA on Tuesday. This is a bullish signal and the pair has continued with slight gains.