- GBP-USD cautious move above 1.481 today, the highest in 09 February, and an encouraging sign of a retest of 2009 high of 1.535 in coming weeks. Next key resistance is at 1.4986, Feb 9 high.
- Services PMI for March outperformed expectations at 45.5 vs. 43.5 to add support to the rally despite HBOS house price index (-1.9% m/m) failed to repeat the positive news that the Nationwide index provided on Thursday.
- There appear to be ‘green shoots’ of recovery emerging across a broader collection of data: slower contractions in services and manufacturing activity, housing prices falling more slowly and consumer confidence stabilising.
- Much bad news had been “baked into” GBP and we see scope for core shorts being unwound. Latest IMM data shows us that net shorts are still greatest in GBP (-31k).
- First resistance at 1.4986 on 09 February will need to be overcome before looking on to 1.535. The upswing would breakdown should GBP-USD slip back below 1.411.
- Note also bullish channel for GBPJPY since Feb (chart 2) is building better credibility, and USDJPY above 100 is helpful. Any dips towards 145 is a buying opportunity.
GBPUSD: Bullish Signals for 1.535
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