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
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