When is the UK construction PMI and how could it affect GBP/USD?
UK construction PMI overview
The UK construction PMI for November is due for release today at 0930GMT, with the figure expected to rebound to 51.2, when compared to October’s 50.8 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 test 1.3400/1.3399 (round number/ 10-DMA), with the downside to extend on a negative surprise, opening floors for towards 1.3373 (classic S3), below which next targets lie at 1.3339 (Nov 29 low). In case of a solid PMI report, the spot could head back towards 1.3500 (key resistance), beyond which doors would open up for a test of 1.3552 (multi-week highs) and 1.3600 (round number).
A bigger-than-expected jump in the construction PMI data cannot be ruled out, given Friday’s solid improvement seen in the manufacturing sector activity report. The construction PMI has widely shown the similar behavior as the manufacturing and services PMIs, analysts Societe Generale pointed out in a research note.
However, the economic releases may play a second fiddle to the EU/UK Brexit deal news, as the working lunch arranged between the UK PM May and EC President Juncker will be closely eyed for any positive outcome on the Brexit bill settlement.
GBP/USD Forecast: 1.35 mark now becomes a key hurdle, Brexit news to remain in focus
“Investors look forward to the UK PM Theresa May and the EU President Jean-Claude Juncker's meeting to work on a Brexit deal. On the economic data front, the UK construction PMI and the US factory orders data might also be looked upon to grab some short-term trading opportunities,” Haresh Menghani, Analyst at FXStreet noted.
About 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 appreciate(or is bullish for) the GBP, whereas a result that values below 50 is seen as negative (or bearish).