FXStreet (Mumbai) – The GBP/USD pair gained almost 200-pips on Monday before stalling around 1.44 levels today. Sterling’s rally could be attributed to better-than-expected UK manufacturing PMI and a weak US personal spending and manufacturing PMI numbers. The immediate focus now is on the UK construction PMI.
Cable could extend Monday’s rally on upbeat construction PMI
Cable’s bullish break on charts has opened doors for a continuation of the corrective rally following a sharp fall in Dec-Jan period. The construction PMI, though least important when compared to other two-services and manufacturing – could be enough to help the GBP bulls chew through offers, if any, around yesterday’s high of 1.4445.
Construction activity had picked up in December following a drop to 7-month low in November largely due to a rise in rise in commercial building activity. The data due for release today is expected to show the pace of expansion in the activity slowed down marginally to 57.6 from Dec’s 57.8.
The manufacturing PMI released yesterday showed the pace of expansion in the activity ticked higher. Hence, there is also a likelihood that construction sector received a “positive rub-off” from the manufacturing sector. Thus, a slightly better-than-expected PMI should note come as a surprise.
In case the number is horribly weak, Sterling could weaken, however, the losses may not be significant since the bulls appear in control following a 200-pip rally on Monday.
GBP/USD Technical Levels
A break above the immediate resistance at 1.4445 (previous day’s high) would open doors for a rise to 1.4476 (strong resistance on the hourly chart), which if taken out could see the pair test 4516 (23.6% of 1.5930-1.4079). On the other hand, the pair could find immediate support at 1.4351 (23.6% of 1.5230-1.4079) could see the pair drop to 1.4324 (5-DMA). A break lower would expose 1.4292 (10-DMA).
The GBP/USD pair gained almost 200-pips on Monday before stalling around 1.44 levels today. Sterling’s rally could be attributed to better-than-expected UK manufacturing PMI and a weak US personal spending and manufacturing PMI numbers. The immediate focus now is on the UK construction PMI.
(Market News Provided by FXstreet)