The UK construction PMI overview
The UK construction PMI for May is due for release today at 0830GMT, with the figure expected to come in weaker at 52.0 when compared to April’s 52.5 points.
Deviation impact on GBP/USD
Readers can find FX Street’s proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 10 and 45 pips in deviations up to 2 to -2, although in some cases, if notable enough, a deviation can fuel movements of up to 70 pips.
How could affect GBP/USD?
Technically, the pair remains on track to test the 1.3400 upside barrier, with further gains to accelerate towards 1.3414/23 (20-DMA/ May 24 high) should the UK construction activity data show an unexpected improvement in May. On a bigger-than-expected drop in the PMI figures, Should the GBP/USD pair could stall its recent recovery-mode and fall back to 1.3333/27 (5 and 10-DMA) support zone, below a test of 1.3252 (June 1 low) is inevitable.
An upside surprise in the construction PMI data cannot be ruled out, given Friday’s unexpected rebound in the manufacturing sector PMI. The construction PMI has widely shown the similar behavior as the manufacturing and services PMIs, analysts Societe Generale pointed out in a research note.
Key Notes
GBP/USD seeking 1.34 ahead of UK’s PMI figures for Monday
GBP/USD Forecast: upbeat UK PMI to help build on last week’s goodish rebound
About the UK construction PMI
The PMI Construction released by the Chartered Institute of Purchasing & Supply and Markit Economics shows business conditions in the UK construction sector. It is worth noting that the construction sector does not influence, either positively or negatively, the GDP as much as the Manufacturing sector does A result that values above 50 signals appreciates (or is bullish for) the GBP, whereas a result that values below 50 is seen as negative (or bearish).
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