Forex - GBP/USD remains moderately higher after upbeat ISM report

The pound remained moderately higher against the U.S. dollar on Monday, after the release of an upbeat U.S. service sector report, although strong U.K. data continued to support demand for sterling. 

GBP/USD hit 1.5378 during U.S. morning trade, the pair's highest since July 29; the pair subequently consolidated at 1.5332, adding 0.26%. 

Cable was likely to find support at 1.5257, the session low and resistance at 1.5412, the high of July 29. 

In a report, the Institute of Supply Management said its non-manufacturing purchasing manager's index rose to 56.0 in July from a reading of 52.2 in June, hitting a five-month high.

Analysts had expected the index to inch up to 53.0 last month. 

But the dollar still remained under pressure after Friday’s weaker-than-forecast U.S. jobs data dampened expectations that the Federal Reserve will start to unwind its asset purchase program later this year. 

The pound rose to session highs against the greenback earlier, after a report compiled by Markit showed that the U.K. services purchasing managers index rose to 60.2 in July from 56.9 in June, outstripping expectations for a reading of 57.2. 

“Although an early call on one month’s data, the forward-looking elements from the survey point to a further strengthening of GDP in Q3 as the UK heads towards escape velocity and self-sustaining economic expansion” Paul Smith, Senior Economist at Markit said.

Data last week showed that the U.K. manufacturing sector expanded at the fastest rate in two-and-a-half years in July.

Elsewhere, sterling was higher against the euro with EUR/GBP retreating 0.56% to 0.8637.

The euro came under pressure after official data showed that retail sales in the currency bloc fell 0.5% in June and were down 0.9% on a year-over-year basis. The month-on-month decline was the largest since December 2012.

A separate report showed that the euro zone’s services PMI rose to 49.8 in July, from a final reading of 48.3 in June.