Article taken from: www.fxstreet.com
By Dhwani Mehta
The UK construction PMI overview/ Carney’s testimony
The UK construction PMI for November is due for release today at 0930GMT, with the figure expected to come in at 52.5, down from October’s 523.2 reading.
Just ahead of the data release, at 0915 GMT, the Bank of England (BOE) Governor Mark Carney is due to testify about the Brexit Withdrawal Agreement along with the three Deputy Governors Broadbent, Cunliffe and Woods before the Treasury Select Committee (TSC), in London.
The main focus will be on the Brexit agreement and not much is expected on the monetary policy, as Carney would like to sidestep amid ongoing Brexit uncertainty.
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 the recent rally above the 1.2750 (5-DMA/ key upside barrier) above which the next resistances are seen at 1.2779 (10-DMA) and 1.2800 (round number). On the flip side, a break below 1.2699 (Dec 3 low), GBP/USD could retest 1.2676 (daily S1) en route 1.2650 (psychological level).
A better UK construction PMI report cannot be ruled today, given Monday’s stellar 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 Carney’s take on the Brexit agreement as the data could have a little impact on the Cable.