GBPUSD – Technical analysis of forex and binary options
United Kingdom - Manufacturing PMI
Later, at 09:30 AM GMT , Markit will release the UK Manufacturing Purchasing Managers' Index (PMI) number, which measures the level of the Diffusion Index by surveying about 600 purchasing managers in the country.
Whereas companies are the first to be affected by a changing economic climate and the Purchasing Managers' Index is calculated based on survey questions covering work, production, price levels, new order statuses as well as inventory conditions. Therefore, binary options traders view this data as a leading indicator of the overall economic health of the country.
Last month the UK Manufacturing PMI came in at 55.4 and expectations for this month are currently set at 54.6.
United States - Unemployment Claims Rate
Thursday, at 12:30 pm GMT, the US Department of Labor will release the Unemployment Claims Number, which measures changes in the number of people who filed unemployment claims over the past week.
Binary options traders view unemployment benefits as one of the most important fundamental indicators of the US labor market. This is primarily due to the direct relationship of unemployment with consumer spending. The increasing number of unemployment complaints indicates a decrease in consumer spending in the economy, which constitutes the bulk of economic activity in the United States.
Over the past few weeks, the number of unemployment claims in the US has been between 246,000 and 260,000. Last week, the number came in at 258,000. If the complaints remain within the mentioned range, they are likely to have a neutral effect on the market.
Trading recommendations for the GBP/USD currency pair
After falling sharply about 770 pips on October 6, 2016, the currency pair found GBP/USD Strong support around the 1,1990 level. This is the second time that the pound against the dollar has enjoyed a remarkable free fall since June, after British voters decided to vote for Brexit, despite the GBP/USD rebound. Around 470 points, it quickly resumed the downtrend, but failed to close below the support level around 1,2130 during the past two weeks.
As the UK manufacturing PMI number is expected to drop to 54.6, we believe it will increase additional downward pressure on the GBPUSD this week.
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