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UK manufacturing PMI: What to expect of GBP/USD?

FXStreet (Mumbai) - The GBP/USD pair is trading moderately weak around 1.5435, but did witness a bullish break on Friday ahead of the monthly UK manufacturing PMI report due later today.

Focus on inflow of new work/export orders

So long as the actual headline figure does not deviate significantly from the expected reading of 51.3, the investors would focus on the new work/new export orders index. The Strength in the GBP has repeatedly led to a decline in the inflow of new work from abroad.

With a sharp drop in the EUR/GBP in October, the inflow of new work from abroad under manufacturing PMI becomes more important for Sterling traders. A sharp drop in the new work index could weigh over Sterling. Meanwhile, a positive surprise from the headline figure could overshadow sub indices and lead to rally in Sterling.

GBP/USD Technical Levels

At 1.5435, the immediate resistance is seen at 1.5463 (50% of 1.5819-1.5107) and the support is seen at 1.5409 (38.2% of Apr-Jun rally). A weaker-than-expected PMI figure along with a sharp drop in the new work could lead to a break below 1.5409 and a drop to 1.5379 (38.2% of 1.5819-1.5107). Meanwhile, a better-than-expected PMI could push the spot above 1.5463-1.5482 (100-DMA) and open doors for 1.5534 (Aug 12 low).

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