GBP/USD rises above minor resistance amid improved UK manufacturing data

United Kingdom - Manufacturing PMI

Yesterday, at 09:30 am GMT, Markit released the UK Purchasing Managers' Index (PMI) number, which measures the level of the Diffusion Index by surveying about 600 purchasing managers in the country.

Since businesses are the first to be affected by a changing economic climate, the PMI is calculated based on survey questions covering business, production, price levels, new order situations as well as the state of inventory. Binary options traders consider this data to be the main indicator of a country's general economic health. Last month, in January, the UK Manufacturing PMI came in at 52.1 and the forecast for February was due at 51.8. However, the actual number came in much better at 52.9.

US - ISM Manufacturing Purchasing Manager Index

GBPUSD-2feb2016

Later, at 03:00 PM GMT, the Institute of Supply Management released the Manufacturing PMI for the United States. The ISM Manufacturing Purchasing Manager Index measures the level of penetration based on a survey of 400 purchasing managers. Purchasing managers in the United States have been included in the supply side of the economy. As most of the companies are working on reducing their expenses and production based on their sales forecast, and by surveying purchasing managers the overall optimism of different companies in the country is revealed. Thus, binary options investors can easily detect the outlook on the economic situation in the country through the Supply Management Corporation's Manufacturing PMI. The ISM manufacturing PMI for the US came in at 48.2 and forecast for this month was set at 48.6. However, the actual number remains unchanged at 48.2.

Trading recommendations for the GBP/USD currency pair

Although the GBP/USD has trended downward in the past few months, the pace of deflation has accelerated since December 13, 2015, when the pair tested the long-term downtrend line and failed to climb above it. Since then, the GBP/USD has fallen about 1150 pips.
On January 21st, the GBP/USD finally found support at 1,4130, and formed a Bullish Exterior Bar (BEOB), which initiated the bullish retracement move. Last week, the GBP/USD price breached and closed above the middle descending trend line, and this week it closed above the minor resistance level around 1.4365.
The UK manufacturing PMI number came in a little better than the market had expected, and the basic expectations also indicate that there is a bullish momentum building in the market.

Under these circumstances, it is advisable for binary options traders to consider placing an order for the GBP/USD with binary options brokers at the current market price, as long as it is trading above the 1,4365 level.

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Ahmed A.
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