The UK manufacturing PMI overview
The UK manufacturing PMI is due for release today at 0930GMT and is expected to show that the pace of expansion in the activity resumed its decline in October after September’s unexpected upturn from 25-month lows. The index is expected to arrive at 53.0 versus 53.8 booked previously.
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 50 pips in deviations up to 1.65 to -2.50, although in some cases, if notable enough, a deviation can fuel movements of up to 80 pips.
How could affect GBP/USD?
At 1.2876, the pair looks set to break above the 1.2900 supply zone as Brexit deal optimism extends into Europe. Should the data show a bigger-than-expected drop, the spot could stall its bounce and ease back below the 1.2850 barrier (10-DMA), below which the next support lies at 1.2800 (round figure).
However, on a positive surprise, the GBP/USD pair could extend the bounce and regain the 1.29 handle, above which next targets lie at 1.2921 (Oct 25 high) and 1.2988 (20-DMA).
The reaction on the data release is likely to be short-lived as the Brexit optimism and the BOE monetary policy events are expected to remain the main market drivers.
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About the UK manufacturing PMI
The Manufacturing Purchasing Managers Index (PMI) released by both the Chartered Institute of Purchasing & Supply and the Markit Economics captures business conditions in the manufacturing sector. As the manufacturing sector dominates a large part of total GDP, the Manufacturing PMI is an important indicator of business conditions and the overall economic condition in the UK. A result above 50 signals is bullish for the GBP, whereas a result below 50 is seen as bearish.