MArkit’s manufacturing PMI disappointed with a drop to 55.3 points. The manufacturing purchasing managers’ index in the UK was expected to tick down from 56.9 to 56.7 points in the month of March. This is the first of a three PMIs.
GBP/USD traded steadily around 1.6660 before the publication and is now on the fall. It reached 1.6643 before stabilizing.
In addition, the figure for February was revised to the downside, to 56.2 points. Prices took a dive to 45.6 points, which is below the 50 point mark separating growth from contraction. Output remains on high ground at 57.7 points.
Here is the slide on the chart:
Manufacturing is a small sector in the UK, with the services sector being the largest. Tomorrow we get the construction PMI. The housing sector leads the current recovery, with fears of a housing bubble, especially in London.
The former top of 1.6618 serves as support for the pair, and 1.6668 works as weak resistance. Cable was on a recovery path towards the end of March but is now struggling to move higher. The broader picture of all three PMIs can determine the next direction for the pound.
For more, see the GBPUSD forecast.
