Although the GBPUSD has been trending higher in recent sessions, there is hope for dollar bulls in the near term. Positive economic developments in the US this morning look to jeopardize the recent 3-day bullish trend for the pound sterling – particularly ahead of resistance at 1.6300.
US Regional Manufacturing Uptick
According to the Federal Reserve Bank of Philadelphia, manufacturing activity surprisingly improved in December. The index reading jumped above expectations of a -3 reading and last month’s -10.7 – rising to a +8.1 print. Subindex findings were particularly bullish, with new orders surged higher in the month, rising to a +10.7 reading versus last month’s -4.6.
Today’s positive gain now makes it the second positive month in the last three for the Philadelphia manufacturing survey, bullish for the dollar in the short term.
Housing Sector Gains Remain Supported
Additionally positive, existing home sales in the US remained higher at a 5.04 million annualized rate, rising above expectations of a 4.88 million pace. The release adds to already growing confirmation that the US housing sector continues to be the backbone of the recent US recovery, and may lend to sustained growth in 2013.
UK Retail Sales Slump
Both economic data points are being held in comparison to less than spectacular retail sales figures in the UK released earlier in the session. According to the Office for National Statistics, consumer spending in November stalled as department stores saw the slowest pace of sales in almost two years. Sales in the month were unchanged as department receipts fell by a pessimistic 1.5%. The figures lend to a rather mixed view of the UK economy as sales dip in light of sustained housing prices and tepidly positive employment.
Nonetheless, with the US fundamental picture shaping up, compared to stagnating UK data, it’s easy to see how the 1.6300 psychological figure will play into any GBPUSD short term decline. The sentiment is being boosted by back to back doji candlestick formations just below the resistance barrier that could prompt a dip to medium term support at 1.6143.