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GBP/USD rises on good construction PMI – can it

More good news is coming out of the UK: Markit’s construction PMI jumped way above expectations: from 51 to 57 points, much more than 51.6 expected. This tremendous leap was followed by a nice move higher by cable: from 1.5130 to 1.5170.

However, also yesterday we received a good manufacturing PMI and a non-dovish rate decision. Both did impact the value of sterling, but these moves were later erased by the greenback’s strength. Is it a sell opportunity before the US Non-Farm Payrolls?

Two US figures raised expectations: a better than expected jobless claims number: only 326K, at the lower end of the recent range. The second was a strong ISM Manufacturing PMI, 55.4 points, with the best employment component in a year.

The dollar has been sweeping the board and NFP could be higher than 184K predicted. However, market expectations have also risen. The magic number is 200K – often thought of as the number the Fed is looking for.

So, if we don’t get a gain of 200K, the greenback is unlikely to keep its momentum. But if the streak of positive surprises from the US continues, this rise of cable could be a selling opportunity.

More:  GBP/USD: Zig-Zag Is Pointing Lower – Elliott Wave Analysis

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.