GBP/USD rises to new highs in two weeks, around mid-1.3100 . areas

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GBP/USD rises to new highs in two weeks, around mid-1.3100 . areas

  • GBP/USD rose GBP/USD Amid signs of recovery in the UK manufacturing sector.
  • The modest decline in the US dollar continued to support the strong momentum.
  • Technical buying above 1.3100 provides an additional boost.

GBP/USD continues GBP/USD On the upside during the early North American session it rose to new highs in two weeks, around the mid-1.3100s in the last hour.

After consolidating briefly during the first part of the trading session on Wednesday, the pair got some solid performances after the latest report from the Bank of England showed that the UK manufacturing sector started the year on a solid footing.

In addition, the quarterly business situation index - a measure of optimism in the manufacturing sector - rebounded sharply to +23 in January from -44 in October and hit its highest level since April 2014.

The data added to recent optimism led by stronger-than-expected UK wage growth figures on Tuesday and forced investors to temper expectations of an imminent interest rate cut by the Bank of England at its next meeting on January 30th.

This resulted in some serious intraday covering short positions, which halted some near-term trading near the 1.3100 level, accelerating the positive intraday movement amid a modest pullback in the USD.

With the strong bullish move on Wednesday, it appears that the pair has finally confirmed a near-term bullish breakout of a three-week-old downtrend channel. Thus, some follow-through strength, perhaps beyond the 1.3200 handle, now appears as a distinct possibility.

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