The Great Britain pound (GBP) rose against the US dollar (USD) on Thursday (May 20, 2021), increasing the price of the GBP/USD currency pair to more than 1.4100, ahead of the release of the UK Market Services PMI news.
The Chartered Institute of Purchasing & Supply and the Markit Economics anticipates releasing numbers for the Market Services PMI Tomorrow (May 21, 2021). FXStreet.com economists expect that the UK Market Services PMI news might register a reading of 62 in May compared to the figure of 61 in the month before.
The UK Market Services PMI is a significant economic indicator of the economy. It reveals the overall economic conditions of the retail sales and employment sectors. However, it does not influence the GDP rate as much as the manufacturing PMI does. Generally speaking, a reading above 50 strengthens the economy and suggests a bullish trend for the GBP/USD pair and vice versa.
The GBP/USD is now trading at approximately 1.4195. If the price continues to rise, the pair may encounter resistance, making it difficult to push the GBP/USD further.
There is one more piece of news regarding US new home sales which the US Census Bureau will release on May 25, 2021. According to economists’ view, It might remain 0.95 M in April compared to the month before data of 1.021 M.
The number of new home sales is an indicator of the state of the housing market. House buyers invest in their homes by furnishing them and financing them. In general, a low reading is bearish for the dollar but positive for the GBPUSD.
Conclusion
Given the pair’s macroeconomic outlook, buying the pair around 1.4051 might be a better short-term option.