UK construction PMI preview: What to expect of GBP/USD?

The UK economy will release its June construction PMI later in the European session, with the figure expected to stay in expansion, although decelerate to 50.6, worse than the previous 51.2 result.

Having the lowest reading since June 2013 in the month of May, the UK construction sector activity is expected to deteriorate further in June as new orders are expected to remain at three-year low, while business activity is likely to be weighed down by the Brexit vote. The residential and commercial building work is also expected to slow further. Now what remains to be seen is that the employment level sustains at four-month tops.

Should the PMI reading match or surprise positively, we could see GBP/USD advancing further beyond 1.33 handle. Contrarily, the cable could revert 1.32 barrier on disappointing results.

GBP/USD: Technical levels

Haresh Menghani, Analyst at FXStreet notes, “Immediate upside resistance above 1.3300 handle is pegged near 1.3325-30 confluence region, comprising of 50-hourly SMA and the upper descending trend-line resistance of the triangular formation. Break above this immediate resistance and a subsequent momentum beyond 1.3350 level is likely to assist the pair initially towards 1.3400 round figure mark.”

“On the flip side, the lower ascending trend-line support of the symmetrical triangular formation, near 1.3260-50 area, seems to protect the immediate downside. A follow through selling pressure below this immediate support, might now drag the pair back towards retesting multi-decade lows to test 1.3150 support area.”