Global macro overview for 05/09/2016:
Better than expected PMI Services and PMI Composite data from the United Kingdom has made the pound rally across the board. The market expectations of 49.1 points of PMI Services index were beaten by the released data of 52.9 points, way better than the previous month figure of 47.4. A similar situation can be spotted at PMI Composite index, where the expected score of 50.8 points was beaten by the revised 53.6, again much better than 47.5 points last month. Moreover, according to IHC Markit/CIPS company, the main reason for a contraction in this index in July (especially in output and new business) were strongly related to the EU referendum. At present, the latest data signalled a return to growth as companies reported that uncertainty has flickered out somewhat. In conclusion, despite pretty good post-Brexit figures from the UK service sector, market participants must wait and see whether this is not a one-off situation, mainly caused by a holiday season.
Let's now take a look at the GBP/USD technical picture in 4H time frame. The market rally after the news release was capped by the technical resistance at the level of 1.3375 and it looks like the price will get back to the horizontal congestion zone. The next important support is a cluster of moving averages around the level of 1.3181 - 1.3114 and the techncial support at the level of 1.3062.
