British Construction PMI Index is based on a survey of Purchasing Managers in the construction sector. The survey includes about 170 respondents, who are surveyed for their view of a wide range of business conditions, including employment, new orders, prices and inventories. A reading which is higher than the market forecast is bullish for the pound.
Here are all the details, and 5 possible outcomes for GBP/USD.
Published on Tuesday at 9:30 GMT.
Indicator Background
Construction PMI pushed over the 50 point level last month, for the first time since August. The markets are anticipating a reading in December of 50.9, which would indicate very modest expansion in the construction sector.
Sentiments and levels
The pound has looked solid since mid-November, gaining close to two cents against the greenback . Will the upward trend continue? The US recovery continues to look bumpy, and the markets are now focused on the looming fiscal cliff crisis. If the politicians in Washington can reach some kind of compromise, this wold likely lead to investors displaying more of an appetite for non-US purchases. This would bolster the pound and allow it to continue to move higher at the expense of the US dollar.. Thus the overall sentiment is bullish on GBP/USD towards this release.
Technical levels, from top to bottom: 1.6247, 1.6122, 1.6060, 1.5992, 1.5930 and 1.5850.
5 Scenarios
- Within expectations: 47.0 to 55.0: In such a case, GBP/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 55.1 to 59.0: An unexpected higher reading can send the pair well above one resistance line.
- Well above expectations: Above 59.1. The likelihood of a sharp expansion is low. Such an outcome could prop up the GBP, and a second resistance line might be broken as a result.
- Below expectations: 43.0 to 46.9: A sharper decrease than forecast could push the pair below one support level.
- Well below expectations: Below 43.0: A very weak reading would indicate sharp contraction in the UK construction sector. This could push downwards on the pound, and GBP/USD could break a second support level.
For more about the GBP, see the GBP/USD forecast.
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