GBP/USD: UK manufacturing PMI preview, selling seen below 1.2920
UK manufacturing PMI for the month of September is seen coming-in at 52.1 vs. August number of 53.3. The actual number is more likely to print around estimates as highlighted by CBI numbers released on September 22.
Weaker Pound Boosts UK Manufacturing in September - CBI
British manufacturing grew strongly in September and orders flowed in at an above-average rate. The Confederation for British Industry's total order book balance held at -5, well above its long-run average of -15.
CBI chief economist Rain Newton-Smith said, “Our members tell us and our surveys show that the fall in sterling has boosted international competitiveness for many businesses, with export order books remaining well above average in September, despite weakening slightly”.
Cable could test trend line hurdle on strong PMI - A better-than-expected UK PMI number could help Cable test supply around 1.2975 (falling trend line level of Sep 7 high and Sep 13 high).
A weaker figure could add to the bearish tone around GBP. UK PM Theresa May said over the weekend that article 50 would be triggered by March 2017. European and US desks are likely to respond to this by offering British Pound.
Technicals – Sell-off likely below 1.2920
Pair’s retreat from falling trend line hurdle on Thursday coupled with a failed attempt to take out trend line hurdle again on Friday followed by a gap down opening today suggests bears have regained control and the spot witness a quick fire selling to 1.2865 (Aug low) once the Asian session low of 1.2920 is breached.
On the higher side, only a daily close above descending trend line would sudden short-term bearish invalidation.
Weaker Pound Boosts UK Manufacturing in September - CBI
British manufacturing grew strongly in September and orders flowed in at an above-average rate. The Confederation for British Industry's total order book balance held at -5, well above its long-run average of -15.
CBI chief economist Rain Newton-Smith said, “Our members tell us and our surveys show that the fall in sterling has boosted international competitiveness for many businesses, with export order books remaining well above average in September, despite weakening slightly”.
Cable could test trend line hurdle on strong PMI - A better-than-expected UK PMI number could help Cable test supply around 1.2975 (falling trend line level of Sep 7 high and Sep 13 high).
A weaker figure could add to the bearish tone around GBP. UK PM Theresa May said over the weekend that article 50 would be triggered by March 2017. European and US desks are likely to respond to this by offering British Pound.
Technicals – Sell-off likely below 1.2920
Pair’s retreat from falling trend line hurdle on Thursday coupled with a failed attempt to take out trend line hurdle again on Friday followed by a gap down opening today suggests bears have regained control and the spot witness a quick fire selling to 1.2865 (Aug low) once the Asian session low of 1.2920 is breached.
On the higher side, only a daily close above descending trend line would sudden short-term bearish invalidation.
