UK Manufacturing PMI Preview: What to Expect of GBP/USD?
UK March manufacturing PMI figure is due for release today and the consensus estimate is calling for a slight improvement to 51.2 from Feb figure of 50.8.
Trapped between key Fibo levels
Having recovered from 1.4330 (23.6% of 1.5930 – 1.3835), GBP/USD made a failed attempt to cut through 1.4368 (38.2% of 1.5230-1.3835) levels ahead of the UK PMI release.
Cable could take out PMI hurdle on strong PMI
As per CBI total trends figure released on March 21st, the Manufacturing sector remained in recession in three months to March. Factory output fell over the three months to March at the fastest pace since September 2009 due to weak demand from foreign customers and depressed demand at home.
Nevertheless, there was a slight improvement. Total orders balance improve to a three-month high of -14% in March after falling back to a four-month low of -17% in February from -15% in January.
Hence, the actual figure may print around consensus estimate. This also means a bigger jump would be a surprise and thus could end up sending Cable back to 1.44 levels ahead of the US non-farm payrolls release.
Plus, it is worth noting Cable dipped on March 21st following the CBI data release. Consequently, the pair may not do much if the actual figure prints around estimates. On the other hand, a dip below February print could spell trouble for the British Pound.
GBP/USD Technical Levels
A break above 1.4368 (38.2% of 1.5230-1.3835) could see the spot could test resistance at 1.4404 (Mar 29 high) and 1.4459 (Mar 30 high). Conversely, a breakdown of immediate support at 1.4330 (23.6% of 1.5930-1.3835) would expose 1.43 under which losses could be extended to 1.4243 (hourly 200-MA).
(Market News Provided by FXstreet)