Today, we saw the release of manufacturing data for the UK for the month of August. (Official Release)Manufacturing PMI: 53.3Forecast: 49.1Previous 48.3Key findings: - UK Manufacturing PMI posts 53.3 in August - Trends in production and new orders post solid rebounds - Weaker sterling currency drives up export orders and input costsAugust saw solid rebounds in the trends in UK manufacturing output and incoming new orders. Companies reported solid inflows of new work from both domestic and export sources, the latter aided by the sterling exchange rate. Employment rose for the first time in the year-to-date. At 53.3 in August, the seasonally adjusted Markit/CIPS Purchasing Managers’ Index® (PMI® ) recovered sharply from the 41-month low of 48.3 posted in July following the EU referendum.The month-on-month increase in the level of the headline PMI (5.0 points) was the joint-greatest in the near 25-year survey history. The gains in the indices tracking output and new orders were similarly among the steepest on record. Manufacturing production increased at the fastest pace in seven months during August, an improvement on the contraction registered in the prior month. All three of the market groups covered by the survey returned to growth, with the strongest expansion registered in the consumer goods sector. (More from the official release)The bottomline is that this was a surprise to the market. In other words, the market expected data to reflect further contraction in the manufacturing sector. Instead, the positive surprise gave the market a reason to buy up the British pound. The GBP/USD for example surged. GBP/USD 1H Chart 9/1(click to enlarge)Bullish breakout before the release:- The 1H chart shows that there was a bullish breakout from a mini consolidation.- After the breakout, price retreated, but respected this consolidation range as support.- Price came back up to the 1.3150 area and consolidated ahead of the data release.GBP/USD surges on manufacturing PMI data:- The manufacturing data helped GBP/USd push through the 1.3150 resistance area, and is now testing previous highs around 1.3275.- In the 1H chart, the bullish surge appears to be part of a bullish continuation run, especially seeing that price action in at least the second half of August was bullish.GBP/USD Daily Chart 9/1(click to enlarge)Bullish continuation within consolidation:- When we look at the daily chart, we can see that indeed price has been bullish since mid-August. - However, GBP/USD has been in a consolidation mode since July, and the rally is within this context.- I think if price breaks above the 1.3280 area, we can anticipate extension towards the 1.34-1.35 area, which is the zone representing consolidation resistance.Resistance:- I would also watch the RSI as it approaches 60. If price stalls in the 1.34-1.35 area, and the RSI starts turning down around 60, we should anticipate a bearish attempt.