CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

GBP/USD: Technical overview gets tested

Stronger PMIs and reopening plans help the pound best the weakened greenback.

GBP/USD Technical analysis, overview, strategies, and levels

Preliminary manufacturing and services PMI (Purchasing Managers Index) figures out of Markit for the UK didn't just beat expectations, but showed expansion on the previous month for the former with a 50.1 reading and a 47 reading for its services sector. There was also the government's July 4th plan to reopen the economy. With the US dollar weakening in the FX market, the pound didn’t need to outperform against most of the FX majors to take GBP/USD’s price higher to cross and close above its 100-day moving average, even if it was in for a partial retracement off the highs that aided sell reversal strategies. Its bear trend technical overview on the daily needs little to shift at this stage, with most of its main indicators neutral, a trending ADX (Average Directional Movement Index), and a positive DMI (Directional Movement Index) cross occurring yesterday.

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IG client* and CoT sentiment for GBP/USD

Retail long bias has dropped to just 54%, not that far off from shifting to majority short.

GBP/USD Chart with retail and institutional sentiment

*The percentage of IG client accounts with positions in this market that are currently long or short. Calculated to the nearest 1%, as of today morning 8am.

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