UK Construction PMI Preview: What to Expect of GBP/USD?
UK construction PMI for March is due for release today. The report is the least important compared to UK manufacturing PMI and services PMI report.
Market expects UK construction PMI to print at 54.00 compared to previous month’s figure of 54.2.
GBP/USD is heading into the release on a weaker note following Friday’s sharp sell-off. An attempt to recover Friday’s losses in Asia ran out of steam near 10-DMA of 1.4240 and fell to 1.4202 before recovering slightly to trade around 1.4220 levels.
Weaker construction PMI could hurt GBP
Last week’s UK Q4 GDP released showed an upward revision to growth rate largely on account of a higher construction sector performance. Hence, a weaker-than-expected PMI figure could trigger a drop in the GBP/USD pair to 1.4171 (previous day’s low).
On the contrary, a better-than-expected construction sector PMI could help Sterling recover a part of Friday’s losses, although Brexit fears may play a spoil sport and make it difficult for the pair to take out key technical hurdles.
GBP/USD Technical Levels
The immediate hurdle is noted at 1.4240 (10-DMA) above which an attempt could be made at 1.4278 (50-DMA). Acceptance above the same may put intraday sell side arguments to rest and open doors for 1.4330 (23.6% of 1.5930-1.3835) – 1.4350 (61.8% of 1.4669-1.3835).
Conversely, a breakdown of support at 1.42 would expose 1.4171 (Friday’s low) - 1.4145 (rising trend line support). A break below 1.4145 would reinforce bears and open doors for 1.4079 (Jan 21 low).
(Market News Provided by FXstreet)
