The currency pair has managed to rebound and is looking to reach new highs on the short term. The Pound seems determined to recover after the las massive drop, the currency has dragged the pair higher also because the greenback was into a corrective phase on the short term, the USD was weakened by the USDX’s impressive drop, the index has fallen unexpectedly lower on the short term, but he could increase again as the FED has signalled that they could hike the interest rate in December. As you already know, the FED has maintained the Federal Funds Rate on hold at 0.50% in the yesterday’s meeting, the USDX has decreased further after this decision, but now looks determined to increase a little, will increase only if the United States will support a bounce back movement.
The GBP/USD has rallied before the BOE and remains higher after the release of the Official Bank Rate. The Bank of England has maintained the Official Bank Rate unchanged, at 0.25%, the rate remains steady after the August decrease, the MPC members have voted unanimously for this decision. Moreover the Asset Purchase Facility has remained steady at 435B, the Monetary Policy Committee members have voted unanimously for this decision as well.
The Cable has edged higher also because the United Kingdom’s Services PMI has increased surprisingly, from 52.6 to 54.5 points, even if the currency traders have predicted a decrease to 52.5 points.
The US data have disappointed a little today as the Unemployment Claims have increased from 258K to265K jobs in the previous week, while the Prelim NonFarm Productivity rose by 3.1%, more than the 1.7% estimate, this is a bad news for the USD. Moreover the Prelim Unit Labor Costs rose only by 0.3%, less than the 1.6% estimate, we’ll see how the USD will react after the Final Services PMI report will be released, the indicator is expected to remain steady at 54.8 points.
The ISM Non-Manufacturing will be released as well, could drop from 57.1 to 56.2 points, signalling the expansion will slow down, the Factory Orders could increase by 0.2%, could remain steady at 0.2% growth for the second month in September.

GBPUSDd

The price has managed to jump again above the lower median line (LML) of the major descending pitchfork, remains to see if this is a valid breakout or not, personally I’m expecting to see a retest of the broken dynamic resistance before the rate will increase further. I’ve said in my previous articles that the rate will move sideways on the short term, but now has edged higher because the USD is under massive selling pressure and because the BOE has maintained the rate on hold.

GBPUSDh

I draw an ascending pitchfork on the Daily chart, personally I would have liked to see a test and retest of the lower median line (lml) of the ascending pitchfork before starting a bullish momentum. The upside target is now at 50% Fibonacci line (descending dotted line).

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Olimpiu Tuns

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