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

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 1, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Mumbai) - The GBP/USD pair bottomed out at 1.4994 on Monday, before closing positively at 1.5055 extending gains to a high of 1.5107 in the European session today. The Sterling traders await the UK manufacturing PMI report due later today.

    Focus on PMI details

    The headline figure is seen cooling to 54.00 from October’s 55.5. So long as the actual figure is around estimates, the commonly seen knee-jerk reaction in the cable may not happen today.

    Moreover, the devil lies in the detail and given the worsening UK current account to GDP ratio the traders would be interested to see if the new export orders ticked higher in November. Meanwhile, input prices and output prices in the manufacturing sector could confirm the BOE’s view and the YoGo poll result that inflation is likely to remain low in the short-term.

    GBP/USD Technical Levels

    A better-than-expected UK PMI could see the pair take out 1.5124 (38.2% of 1.5336-1.4994) and rise to 1.5164 (Sep 4 low) – 1.5185 (July 2014-Apr 2015 plunge). On the other hand, a weaker PMI figure could see the pair drop below 1.5087 (61.8% of Apr-Jun rally) and extend losses to 1.5028 (Nov 27 low). The pair witnessed a bearish monthly closing on Monday as it closed below 1.5107 levels, but a recover from low of 1.4994 led to a formation of the bullish pinbar formation.
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