The British Manufacturing PMI (Purchasing Managers’ Index) is based on a survey of purchasing managers in the manufacturing sector. Respondents are surveyed for their view of the economy and business conditions in the UK. A reading which is higher than the market forecast is bullish for the pound.
Update: UK Manufacturing PMI hits 54.4 – within expectations – GBPUSD slides
Here are all the details, and 5 possible outcomes for GBP/USD.
Published on Wednesday at 8:30 GMT.
Indicator Background
Market analysts are always interested in the views of purchase managers on the economy, as the latter are considered to be attuned to the latest economic and financial developments, and their expectations could be an indication of future economic trends.
The index has been on an upward trend in recent readings, and rose to 54.1 in the February report. This beat the estimate of 53.5 points. The upward swing is expected to continue in the March release, with a forecast of 54.5 points.
Sentiments and levels
GBP/USD continues to struggle, as the pound dipped below the 1.48 last week. Is the key 1.50 level slipping away? In the US, it seems that the losing streak of poor data is reaching an end, as seen with last week’s outstanding New Home Sales and Unemployment Claims. So, the overall sentiment is bearish on GBP/USD towards this release.
Technical levels, from top to bottom: 1.6065, 1.60, 1.59, 1.5775, 1.57, 1.55 and 1.5469.
5 Scenarios
- Within expectations: 51.0 to 58.0: In such a case, GBP/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 58.1 to 62.0: An unexpected higher reading can send the pair well above one resistance line.
- Well above expectations: Above 62.1: The likelihood of a sharp expansion are low. Such an outcome would prop up the GBP and a second resistance line might be broken as a result.
- Below expectations: 47.0 to 50.9: A sharper decrease than forecast could push GBP/USD downwards and break below one support level.
- Well below expectations: Below 47.0: A reading well below the 50-point level could push the pair below a second support level.
For more about the pound, see the GBP/USD.
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