EURGBP: GBP Strength Builds, But Could Reach Limit Alongside Z6 Rates

Service firms in New York State got off to a similarly weak start to September as their manufacturing counterparts saw yesterday. These are the first September readings for the regional Fed surveys. 

• The general activity index surprisingly fell to -19.4 (cons -5.8) in September after -11.7 in Aug to come close to the -19.8 low in April, having last been lower in Jan 2023.
• The six-month ahead measure isn’t as pessimistic though, at -5.8 in Sept after -6.8 in Aug vs a recent low of -28.1 in May.
• In one upside to the report even if not strong, the capital spending index pushed up to 1.4 for its first positive reading since Dec 2024 having recently bottomed at -12.6 in June.
• Other details from the press release: “Employment edged lower, and wage growth remained modest. Supply availability continued to worsen.”
• “Input and selling price increases remained elevated but were little changed from last month. Firms remained pessimistic about the outlook.”
• As with the manufacturing report, the survey was collected through Sep 2-9.

• RES 4: 6750.50 2.000 proj of the Aug 20 - 28 - Sep 2 price swing
• RES 3: 6748.50 1.236 proj of the Aug 1 - 15 - 20 price swing
• RES 2: 6712.33 1.764 proj of the Aug 20 - 28 - Sep 2 price swing     
• RES 1: 6700.00 Round number resistance 
• PRICE: 6671.25 @ 15:03 BST Sep 16
• SUP 1: 6559.62 20-day EMA
• SUP 2: 6506.50 Low Sep 5 
• SUP 3: 6452.53 50-day EMA 
• SUP 4: 6417.25 Low Aug 12 

A bull cycle in S&P E-Minis remains intact and the contract has started this week on a bullish note. Fresh cycle highs reinforce current bullish conditions. The move higher confirms a resumption of the primary uptrend and maintains the bullish price sequence of higher highs and higher lows. Sights are on the 6700.00 handle next and 6712.33, a Fibonacci projection. On the downside, initial support to watch is 6559.62, the 20-day EMA.

• MNI: US JUL BUSINESS INVENTORIES +0.2%; SALES +1.0%
• US JUL RETAIL INVENTORIES +0.2%