When is the UK construction PMI and how could it affect GBP/USD?
|The UK construction PMI overview
The UK construction PMI for March is due for release today at 0830GMT, with the figure expected to come in weaker at 50.8 when compared to January’s 51.4 points.
Deviation impact on GBP/USD
Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 10 and 45 pips in deviations up to 2 to -2, although in some cases, if notable enough, a deviation can fuel movements of up to 70 pips.
How could affect GBP/USD?
Technically, the pair remains on track to conquer the 1.41 handle, with the upside to accelerate on a positive PMI reading, opening doors towards 1.4128 (classic R2/ Fib R3), above which the next target lies at 1.4200/02 (round number/ Mar 28 high). Should the data show a bigger-than-expected drop, the spot could reverse course in a bid to test the key support near 1.4000 levels, below which a test of 1.3964 (50-DMA) looks imminent.
A positive surprise in the construction PMI data cannot be ruled out, given yesterday’s unexpected improvement in the manufacturing sector activity. The construction PMI has widely shown the similar behavior as the manufacturing and services PMIs, analysts Societe Generale pointed out in a research note.
Key Notes
GBP/USD Forecast: move beyond 1.41 handle likely to be capped, UK PMI/US data eyed
GBPUSD: A neutral stance seems wise again today and a range of 1.40/1.41
FX Today: Optimism could fade on escalating trade tensions
About the UK construction PMI
The PMI Construction released by the Chartered Institute of Purchasing & Supply and Markit Economics shows business conditions in the UK construction sector. It is worth noting that the construction sector does not influence, either positively or negatively, the GDP as much as the Manufacturing sector does A result that values above 50 signals appreciates (or is bullish for) the GBP, whereas a result that values below 50 is seen as negative (or bearish).
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