When is the UK construction PMI and how could it affect GBP/USD?

The UK construction PMI overview

The UK construction PMI for January is due for release today at 0930GMT, with the figure expected to ease to 52.0 when compared to December’s 52.2 points.

Deviation impact on GBP/USD

 Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 10 and 45 pips in deviations up to 2 to -2, although in some cases, if notable enough, a deviation can fuel movements of up to 70 pips.

How could affect GBP/USD?

Technically, the pair remains on track to conquer the 1.43 handle, with the upside to accelerate on a positive surprise, opening doors towards 1.4345 (multi-year tops), above which next target lies at 1.4400 (natural resistance). Should the data show a bigger-than-expected drop, the spot could reverse towards 1.4235 (daily pivot), below which a test of 1.4186 (5-DMA) becomes imminent.

A bigger-than-expected jump in the construction PMI data cannot be ruled out, given yesterday’s deceleration in the manufacturing sector activity. The construction PMI has widely shown the similar behavior as the manufacturing and services PMIs, analysts Societe Generale pointed out in a research note.      

However, the UK construction PMI report could play a second fiddle to the US labor market report, which could throw fresh light on the Fed’s outlook on the interest rates this year.

Key notes

Highlights from TD Global Daily - TD Securities

GBP/USD gathers strength at resistance ahead of PMI, US NFP

About the UK construction PMI

The PMI Construction released by the Chartered Institute of Purchasing & Supply and Markit Economics shows business conditions in the UK construction sector. It is worth noting that the construction sector does not influence, either positively or negatively, the GDP as much as the Manufacturing sector does A result that values above 50 signals appreciate (or is bullish for) the GBP, whereas a result that values below 50 is seen as negative (or bearish).