GBPUSD: Cable Spikes after Solid PMI number

05 / 06 / 2018
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The pound was bid on Tuesday and the GBPUSD pair was seen 0.50% higher, buoyed by the good PMI number. The cable was trading around 1.3380 during the London session.

The services PMI rose notably from 52.8 to 54.0, while economists had expected only 52.9 in May. This was a big surprise and traders bought sterling afterward.

Later in the day, the non-manufacturing ISM is due from US and the market expects another strong reading at 57.9, up from 56.8 in April.

In addition, the JOLTS job openings indicator is expected at 6.49 million, down from 6.55 million in the previous month.

Cable is now testing the strong support line, which is now a resistance and is located at 1.34. If broken, the current bearish trend could be cancelled for now, with the next target at the 1.35 elvel.

On the other hand, the support is now seen at 1.3310 and as long as sterling trades above, the short-term outlook looks positive. The next demand zone is seen at 1.3210. In all cases we strongly recommend to have rigorous money and risk management.

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