The pound has seen choppy price action as it tries to consolidate yesterday’s losses generated by the weaker than expected GDP figures and dollar support. A better than expected PMI manufacturing reading to 47.0 from 45.4 which was the highest since May 2008 provided a brief bout of support as the economy continues to show signs of stabilizing. The GBP/USD losses were stopped by the 20-Day SMA which still leaves potential for further appreciation. However, sterling has steadily declined against the Euro and a break below the technical level could lead to extended losses. A concern for pound bulls will be the 10th straight decline in the index of services which fell 1.2%. The sector accounts for 70% of the economy and unless domestic growth significantly improves the outlook for a recovery will dim. The dollar has been choppy overnight after yesterday’s gains on the back of the weaker consumer confidence reading. The dollar positive reaction to the fall in risk appetite keeps the correlation relevant in determining future price action. Therefore, we could see greenback weakness following the ADP jobs report which is forecasted to show the economy lost 394K jobs an improvement from -532K in May. The report is an early indicator for the upcoming Non-farm payroll and generally produces a strong initial reaction. The ISM manufacturing report will also impact dollar sentiment and the expected improvement to 44.6 from 452.8 will also generate risk appetite. The improvement in the global cyclical indicator will raise hopes of a global recovery which could pressure. However, a flat pending home sales print and negative construction spending will raise concerns over the housing sector which remains the key to a U.S. recovery and may dampen optimism and lend dollar support.