- The pound adds to Thursday’s optimism and reaches 1.3565.
- The final UK manufacturing PMI reached 57.1 in September.
- Manufacturing ISM is next on the agenda.
The pound maintains the recovery well and solid and now raises the GBP/USD to new multi-day highs near 1.3570 on Friday.
GBP / USD rises on the weakness of the dollar
The pound advanced for the second consecutive session on Friday and extends further north of the recent break of the 1.3500 barrier after bottoming at new 2021 lows near 1.3400 on September 29.
Renewed and rather moderate selling pressure that hit the dollar forced the US Dollar Index (DXY) to quickly leave the area of recent yearly highs around 94.50 and shift focus to the 94.00 zone instead, all of which was it translates into a very welcome oxygen for the space associated with risk.
The pound finds its way higher on Friday following the intense September selloff fueled by the strength of the dollar, the usual COVID nerves and the fuel crisis that erupted in recent days. On the latter, the latest news says that the fuel shortage could last another week.
The British pound’s bullish move comes despite the decline in 10-year yields, which recede to the 1.00% barrier so far at the end of the week, all amid the widespread recovery in bond prices. .
In the UK data space, the final manufacturing PMI for the month of September beat estimates by 57.1 although it fell back from 60.3.
Technical levels
At time of writing, the pair is gaining 0.35% at 1.3560 and a breakout of 1.3598 (10-day SMA) would open the door to 1.3750 (weekly high on Sep 23) and then 1.3838 (200-day SMA). On the other hand, the next support emerges at 1.3411 (low of September 30) followed by 1.3187 (low of December 21, 2020) and finally 1.3134 (monthly low of December 11, 2020).
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