GBP/USD continues to rise on the back of the pound's recovery | 07 Enero 2025

Event to pay attention to today:

17:00 EET. USD - ISM Services PMI

GBPUSD:

The GBP/USD pair continued to rise for the second day in a row, starting the new trading week with a seven-tenths of a cent gain above 1.2500 after last week's bearish dip below 1.2400. Purchasing Managers' Index (PMI) data fell short of expectations in both the UK and the US. Nevertheless, the general atmosphere of rising risk held back safe-haven flows into the US Dollar.

UK PMI data for December completely failed, falling below Wall Street forecasts, declining but remaining above the 50.0 mark, signalling an expected contraction. In particular, the composite PMI fell to a 13-month low, dropping to 50.4 from an expected 50.5.

The final US PMI data from S&P Global on Monday fell slightly short of expectations, with the composite index and the services PMI for December rising, albeit less than analysts had expected. Both figures were revised slightly down from preliminary data, but still strengthened as the US economy continues to grow.

The key indicator of the week will be the ISM Services PMI for December. Average market forecasts expect the reading to rise to 53.0 from 52.1 in the previous month. Friday's Non-Farm Payrolls (NFP) data will set the tone for market dynamics this week as investors expect a ‘golden mean’ that will help push the Federal Reserve (Fed) to cut rates further, but not too weak or strong in either direction.

Trading recommendation: Watching the level of 1.2550, trading mainly with Buy orders.

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