The UK 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 jumps to 53.3 – GBP follows
Here are all the details, and 5 possible outcomes for GBP/USD.
Published on Thursday 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 dropped in the July release, coming in at 48.2 points. This was short of the estimate of 49.1 points, and marked a second straight month of contraction. The market forecast for August is 49.1 points.
Sentiments and levels
After an upbeat speech from Janet Yellen, a September rate hike is back on the table. British numbers have been surprisingly strong since Brexit, but concern remains about the strength of the UK economy, and it’s questionable if Q3 data will continue to look solid. So, the overall sentiment is neutral on GBP/USD towards this release.
Technical levels, from top to bottom: 1.3514, 1.3315, 1.3222, 1.3112, 1.2902 and 1.2778.
5 Scenarios
- Within expectations: 46.0 to 52.0: In such a case, GBP/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 52.1 to 56.0: An unexpected higher reading can send the pair above one resistance line.
- Well above expectations: Above 56.0: Such an outcome would likely prop up the pound, and a second resistance line might be broken as a result.
- Below expectations: 42.0 to 45.9: A sharper decrease than forecast could push GBP/USD downwards and break one level of support.
- Well below expectations: Below 41.9: A reading deep in negative territory would indicate sharp contraction in the manufacturing sector. This would likely push the pair downwards, possibly breaking a second support level.
For more about the pound, see the GBP/USD.