Sterling continued its uptrend during the European part of Wednesday's session, though in somewhat tighter-range since there were no major data releases, and holiday season is still ongoing so there is less liquidity at the markets. However, by the end of the day it gave up all the gains finishing the session around 1.5580 level. As for Friday, main market mover will be UK Manufacturing PMI data.
Weaker than expected figures would push pair lower, to 1.5550 level initially, but with a support extending all the way to 1.55 handle, so in this general area we would consider selling the pair. On the other hand better than forecasted data would cause break above 1.56 handle, but with a resistance around 1.5630 and 1.5650 level in extension. In long-term trends we are neutral for this pair, as it remains within its consolidation range. We believe that it will eventually break lower, but would not place any larger bids until we see break below 1.55 handle.