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

The UK construction PMI overview

The UK construction PMI for March is due for release today at 0830GMT, with the figure expected to come in at 49.8, slightly better from February’s 49.5 reading.

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 looks to extend its recent bearish bias towards the 1.3000 mark. On a bigger-than-expected rise, the bulls could be offered a temporary reprieve amid ongoing Brexit uncertainty.  The prices could reverse course and revisit the daily resistance near the 1.3085 region, a break above which the 1.31 handle will be tested. On the flip side, a disappointing reading could accentuate the downside, with the GBP/USD pair likely to test 1.3000 (round number) en route 1.2978 (March 29 low).

A stellar UK construction PMI report cannot be ruled today, given Monday’s upbeat manufacturing PMI numbers. 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 reaction in the GBP is more likely to be driven by the Brexit-related developments amid increased odds of a no deal Brexit or longer delay.

Key Notes

GBP/USD rallies seen struggling near the 1.3160 region – Commerzbank

GBP/USD Analysis: Back under some selling pressure after UK Parliament again rejects Brexit alternatives

EU's Barnier: Strong justification needed for long Brexit Delay

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 appreciates (or is bullish for) the GBP, whereas a result that values below 50 is seen as negative (or bearish).