Today the United Kingdom’s Manufacturing PMI hit 51.4 after a revised 49.2 in November.
The expansion in manufacturing was not expected by economists and is certainly a positive news release for the UK in this first week of 2013.
According to Reuters, this could mean the UK has dodged another contradiction period for their economy.
“Britain’s economy is forecast to shrink 0.1 percent in the last three months of 2012. But following stronger-than-expected official services sector data late last month, Wednesday’s figures boost prospects that the economy can avoid slipping into its third period of contraction since the 2008 financial crisis.” – Reuters
Taking a look at price action we see that the GBP/USD is also at a critical resistance level. If it does happen to break through the 1.625 level, quarter 1 of 2013 could be a bullish one.
2012 was a rough year for the United Kingdom to say the least. A recession and 2 rounds of Quantitative Easing (February and July) surely effected the Great British Pound’s sentiment. Construction PMI will be released Thursday and Services PMI will be released Friday. If these compliment the very good Manufacturing PMI from Wednesday, the Pound could really take off.
Towards the end of next week more Pound news, including the Bank Rate and the Manufacturing Production numbers, is going to be released also. If the Fundamental and Technical collide, the GBPUSD could turn out to be a great long position in this first quarter of 2013. It could very well depend on whether or not it breaks out of the current resistance level.
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