GBP/USD Hits 2020 High on Strong UK Data

Fundamental analysis of Forex market

The British pound started the trading week with huge gains of 2.0% and the upswing has continued on Tuesday. Currently, GBP/USD is trading at 1.3442, up 0.55% on the day. Earlier in the day, the pair climbed to 1.3482, recording its highest level since December.

UK Manufacturing shows strong expansion

The British manufacturing sector continues to gain steam. The Manufacturing PMI has accelerated for four successive months, rising to 55.2 in August, up from 53.3. This points to significant expansion.

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There was other positive news out of the UK on Tuesday. Mortgage Approvals rose to 66 thousand, up from 40 thousand beforehand. This figure beat the forecast of 55 thousand. Consumers are taking out more loans, as Net Lending to Individuals jumped to GBP 3.9 billion, up from 1.8 billion in the previous release. This marked a five-month high. On the inflation front, the BRC Shop Price Index will be released later in the day. The index hasn’t posted a gain since May 2018.

GBP/USD Technical

GBP/USD has lost ground in the North American session, after posting gains earlier in the day.

  • GBP/USD broke above resistance at 1.3410 in the Asian session. The next resistance line is 1.3451
  • 1.3315 is the first line of support. The next support line is 1.3261. This is followed by the 10-day MA at 1.3212