UK Data Recovers Sharply In June

<p>The British Pound has seen higher levels of demand over the last 24 hours in the wake of a strong set of flash PMI data sets for June. The HIS Markit/Cips data showed a firm rebound in both the factory and services sectors with the manufacturing reading returning to growth for the first time since the COVID-19 crisis struck.</p>
<h2>Manufacturing Back in Growth</h2>
<p>The June manufacturing PMI saw an improvement to 50.1, marking a near ten-point recovery from the 40.7 level recorded in May. Marking a return to expansionary territory, the data was also well above the 45.2 consensus estimate established ahead of the release. This data reflects a far greater recovery than was forecast over the month and will no doubt be welcomed by the BOE. Andy Haldane of the BOE, who dissented and voted against further QE at this month’s meeting, suggested that the current recovery in UK data is happening at a faster pace than the BOE is currently forecasting and if seen to continue, would mean that the economic damage suffered as a result of the COVID-19 disruption has only been half as bad as the BOE’s own forecasts suggested.</p>
<p><img class="aligncenter wp-image-45861 size-full" title="UK Data Recovers Sharply In June" src="http://blog.tickmill.com/wp-content/uploads/2020/06/pmi.png" alt="UK Data Recovers Sharply In June" width="1460" height="680" srcset="https://blog.tickmill.com/wp-content/uploads/2020/06/pmi.png 1460w, https://blog.tickmill.com/wp-content/uploads/2020/06/pmi-300×140.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/06/pmi-1024×477.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/06/pmi-768×358.png 768w" sizes="(max-width: 1460px) 100vw, 1460px" /></p>
<h2>Services Sector Sees Strong Recovery Also</h2>
<p>The services sector also saw a firm recovery from the prior month’s record low of 29 though, at 47 on the month, is yet to return to expansionary territory. Yet again though, the reading was well above the 39 level expected and marks a vast improvement in activity over the month, which marked the first full month of lockdown measures being lifted.</p>
<p>The recovery in the UK is now at a crucial stage and with further lifting of measures scheduled for July 4^th when the PM has confirmed that the hospitality sector will be able to reopen in a reduced capacity, the market is taking an optimistic view that the recovery will continue in a linear fashion.</p>
<p>The BOE itself, however, has highlighted the significant uncertainty in the outlook due to the difficulty in predicting how the pandemic will develop. The WHO has warned that the virus has entered a new and dangerous stage and the BOE has warned of the complications and downside risks linked to any further outbreak of the virus in the UK.</p>
<h2>Technical Views</h2>
<p><strong>GBPUSD (Bullish above 1.23)</strong></p>
<p>GBPUSD remains within the middle of the recent range. However, while above both the yearly pivot and VWAP, the near-term bias remains bullish with the 1.2649 highs the main level to break to the topside, opening up the path to the yearly R1 at 1.29. Any reversal below the yearly pivot at 1.23 however, will turn attention to the .1963 support next.</p>
<p><img class="aligncenter size-full wp-image-45857" src="http://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-24-at-08.50.59.png" alt="" width="2732" height="1626" srcset="https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-24-at-08.50.59.png 2732w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-24-at-08.50.59-300×179.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-24-at-08.50.59-1024×609.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-24-at-08.50.59-768×457.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-24-at-08.50.59-1536×914.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-24-at-08.50.59-2048×1219.png 2048w" sizes="(max-width: 2732px) 100vw, 2732px" /></p>
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