When is the UK Manufacturing PMI and how could it affect GBP/USD?
The UK Manufacturing PMI overview
The UK manufacturing PMI is due for release today at 0930GMT and is expected to show that the pace of contraction in the activity quickened in September after rebounding to four-month highs in September. The index is expected to arrive at 48.1 versus 48.3 booked previously.
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 50 pips in deviations up to 1.65 to -2.50, although in some cases, if notable enough, a deviation can fuel movements of up to 80 pips.
How could affect GBP/USD?
The Cable continues to face rejection near the 1.2970 region, as the bulls consolidate the recent upside above the midpoint of the 1.29 handle, with the immediate focus now shifting towards the UK Manufacturing PMI data release.
Should the data suggest a bigger-than-expected drop, the spot is likely to come under fresh selling pressure, dragging the spot further towards 1.2906/00 (5-DMA/ round number), below which 1.2845 (Oct 30 low) could be targeted.
However, on a positive surprise, the GBP/USD pair could take-out the weekly tops at 1.2976, above which 1.3000 (psychological level) could be tested en route 1.3014 (Oct highs).
Key Notes
GBP Futures: upside looks exhausted
US NFP to steal the limelight today – Danske Bank
GBP/USD forecast: Bulls await a sustained move beyond 1.30 mark, eyeing UK/US macro data
About the UK Manufacturing PMI
The Manufacturing Purchasing Managers Index (PMI) released by both the Chartered Institute of Purchasing & Supply and the Markit Economics captures business conditions in the manufacturing sector. As the manufacturing sector dominates a large part of total GDP, the Manufacturing PMI is an important indicator of business conditions and the overall economic condition in the UK. A result above 50 signals is bullish for the GBP, whereas a result below 50 is seen as bearish.