FxWirePro: GBP/USD gains as UK manufacturing PMI beats expectations

• GBP/USD strengthened on Tuesday as stronger-than-expected UK manufacturing PMI data supported the pound.

. The composite S&P Global PMI climbed to 52.1 in December’s flash reading from 51.2 in November, beating all forecasts   but remaining below its long-term average.

• The headline PMI and the services index both hit two-month highs, while manufacturing activity recorded its strongest reading in 15 months.

• Separate data showed, Britain’s unemployment rate rose to its highest level since early 2021, while private sector pay growth slowed to its weakest pace in nearly five years ahead of Finance Minister Rachel Reeves’ annual budget last month.

• The Bank of England is expected to cut interest rates on Thursday for the first time since August, though the decision is likely to be close as some policymakers remain concerned about persistent inflation pressures..

•   Immediate resistance is located at 1.3438(38.2%fib), any close above will push the pair towards 1.3476(Higher BB)

•  Strong support is seen at 1.3340(61.8%fib) and break below could take the pair towards 1.3261(SMA 20).

  Recommendation: Good to buy around 1.3400, with stop loss of 1.3330 and target price of 1.3500