 Hello and welcome to CMC Markets on Thursday 1 September and this quick look at the markets and today I am going to focus on the Pound in the wake of that much better than expected manufacturing PMI number for August. We saw manufacturing activity in the UK economy rebound quite significantly to its best levels this year, 53.3 from 5 yellows in July at 48.3. You may recall less than a month ago the Bank of England slashed interest rates, well halved interest rates from 0.5% to 0.25% embarked on a corporate bond buying program and extended QE by quite a significant amount. This was in response to what was perceived at the time to be a significant slowdown in the UK economy and certainly the rebound in the manufacturing sector somewhat gives the lie to what I would and I still maintain was a very knee-jerk reaction from the Bank of England. Now there are those out there who will argue that manufacturing only accounts for 10% of the UK economy and absolutely it does but certainly the decline in the pound has helped in the context of the rebound in the manufacturing sector it has also put upward pressure on input and output prices. That being said since the June referendum we've seen a significant rebound in retail sales and we've also seen an improvement in some of the jobless data in the wake of that vote. So I think that really does really push the focus now from the manufacturing data that we saw this morning onto the services data that is due out on Monday. So while it's important to celebrate the fact that we've seen a significant rebound in the manufacturing sector certainly doesn't mean the UK economy is out of the woods yet but it's certainly a good sign. Services PMI in July slumped quite sharply to 47.4 and that was a bit of a shock at the time but given some of the improvement that we've seen in the UK data it's not beyond the realms of possibility that on Monday we could see a significant rebound in that services PMI as well and if that is the case then ultimately we could see the pound against the dollar start to push quite a bit higher. We've certainly seen the initial reaction for today manufacturing makes up 10% of the UK economy so it's important not to get too carried away and we are approaching a very key resistance level or as my colleague Jasper calls it on a Wooga breakout level 130-280, 133. If we can break through there then we can probably head back towards the range highs around about 135 but I think in the context of sterling strength what's more important I think is its reaction against the euro because what we have seen is a significant weakening in eurozone data and that could actually prompt the ECB to become more activist in its monetary policy rather than the Bank of England. Certainly the improvement in UK data could actually keep the Bank of England from easing monetary policy any further. Certainly I think if it continues to improve at the rate of knots we could be potentially talking about a rate hike though I don't think we're anywhere close to that yet given that Mr Carney will be unlikely to want to admit that he was wrong in cutting rates in the first place but certainly in the context of this particular debate those of you who have been following my updates on the chart forums will know I've been quite bearish on euro sterling and the next key support level on this particular pair currently sits around the August lows at 83, 40, 83, 50 so that's really the key level to keep an eye out for at the moment we are approaching a little bit oversold on the daily chart so we could get a bit of a rebound we could get a rebound in euro sterling as a result of the non-farm payrolls data that we've got out tomorrow but also some disappointment on the economic data that we could do that we could be seeing on Monday. So important caveats with respect to the pound against the dollar euro and euro sterling non-farm payrolls could throw a spanner in the works on the cable and the services PMIs could throw a spanner in the works on Monday with respect to euro sterling.