The weaker than expected PMI data for the UK manufacturing sector did not prevent the GBP / USD currency pair from ending the day in positive territory near the 1.43 mark yesterday. A weak dollar came to the aid of the bulls again, whose sales supported the currency pair and allowed it to reach the highs of the year again.
And although, in general, the news background for the British currency remains mostly neutral, with a gradual increase in the negativity associated with the coming new and new comments on the great difficulties that negotiators from the EU and the UK will experience at the second stage of negotiations Brexit, a weak dollar so far compensates for all these fears pushing the currency pair up.
Today, the pair GBP / USD dollar will again remain in the spotlight because the expected Nonfarm Payrolls outweigh the importance of the published PMI of the UK construction sector, which by the way turned out to be significantly below the forecast level, 50.2 vs. 52.2, provoking a moderate decline in quotations.
Prospects for further price movements will primarily depend on the content of the report on the US labor market. Data better than the median of the forecast is likely to have a strong deterrent effect on GBP / USD buyers, and the indicators worse or at the forecast level will most likely lead to a new wave of sales of the US currency, because in the current situation there is a feeling that investors are only bothering to search for new reasons for selling the dollar.
Whichever report comes out, the proximity of current quotes to the highs of the year significantly increases the likelihood of establishing a new peak, bulls are unlikely to miss this great opportunity and not take advantage of the volatility accompanying nonpharma.
The technical situation also has a further increase in quotations in the direction of the current maximum at 1.4343. At the same time, the RSI indicator is still moving mainly with a side orientation, and the joint-stock company fully supports buyers in their efforts to move upwards. Therefore, today, with high probability, we can expect the update of hai at 1.4343, but here the further direction of movement will probably be determined by the fundamental factors.
Our recommendations: it’s best to stay out of the market, in case of good Nonfarm Payrolls data, you can consider sales when forming a false breakdown of 1.4343.