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UK construction PMI preview: What to expect of GBP/USD?

FXStreet (Mumbai) - The GBP/USD found support at the hourly 50-MA and is flirting with 1.5074 (23.6% of 1.5336-1.4994) levels ahead of the UK construction PMI report.

Focus on inflow of new work

UK's Markit construction PMI for the month of November is expected to be dropping slightly to 58.6 by market consensus, from that of its previous month's 58.8 reading.

October’s purchasing managers’ index for the building industry showed the sector was doing great. A surge in new work across the UK construction industry in October cheered financial markets and sent the pound close to a 10-week high against a basket of currencies. The rise in the incoming new work was the steepest since October 2014.

A similar effect on Pound can be expected today if the new work inflow continues to tick higher. However, shortage of skilled staff remains a major problem. This means the firms could have hired more workers in order to compensate for low productivity and thus strong employment numbers under construction PMI may not strengthen Sterling.

GBP/USD Technical Levels

At 1.5074, the immediate resistance is seen at 1.5102 (hourly 200-MA) and 1.5107 (Sep, Oct monthly lows), above which the pair could test 1.5124 (38.2% of 1.5336-1.4994). A break higher would expose 1.5185 (23.6% of July 2014-Apr 2015 plunge). On the other hand, the hourly 50-MA at 1.5064 could offer immediate support under which the pair could test 1.5028 (Nov 27 low) and 1.50 levels. A break lower would expose 1.4951 (Jan 23 low).

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