Global macro overview for 05/12/2016:
Details of the November 2016 UK Markit/CIPS Services PMI report revealed better than expected figures. Market participants expected a slight drop from 54.5 points to 54.2 points, but the data beat expectations of 55.2 points for the last month. The biggest gain was noted in new orders: 54.9 versus 55.7 previously. All the data looks goods on the surface, not only the PMI for services and manufacturing, but the rest of the economic indicators are still beating expectations. Nevertheless, the sentiment is dropping lower, with politics and inflation the main reasons behind the decrease. This quote from Markit report is the perfect conclusion of the current situation: "The further upturn in the vast services sector shows that the pace of UK economic growth remains resiliently robust in the fourth quarter, despite ongoing uncertainty caused by Brexit".
Let's now take a look at the GBP/USD technical picture in the 4H time frame. The bulls have managed to break out above the technical resistance at the level of 1.2676 and it looks like they are trying to test the next technical resistance at the level of 1.2772, which is just above the 50%Fibo of the last swing down. In case of a further breakout, the next resistnace is 61%Fibo at the level of 1.2903.
