When is the UK construction PMI and how could it affect GBP/USD?

UK construction PMI overview

Tuesday's UK economic docket features the release of construction PMI for the month of June, due for release at 08:30GMT. Consensus estimates point to a modest rebound from the previous month's reading of 48.6 to 49.3 in June, though remain in contraction territory for the fourth month in the previous five. 

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 20-25 pips in deviations up to +0.19 to -0.23 during the first 15-minutes, although in some cases, if notable enough, a deviation can fuel movements of up to 45-50 pips in the subsequent 4-hours.

How could affect GBP/USD?

Ahead of the release, the GBP/USD pair was seen trading with a mild negative bias around the 1.2630-25 region and any disappointment might now pave the way for a further near-term depreciating move. The 1.2600 round figure mark is likely to act as immediate support, which if broken might turn the pair vulnerable to accelerate the slide towards the 1.2535 intermediate support en-route the key 1.2500 psychological mark.

Alternatively, a stellar construction PMI might prompt some short-covering move, albeit persistent fears of a no-deal Brexit is likely to cap any meaningful up-move ahead of the BoE Governor Mark Carney's scheduled speech. Immediate resistance is pegged near the 1.2675 level and is closely followed by the 1.2700 handle, above which the pair is likely to aim towards testing 50-day SMA, around the 1.2775 region.

Key Notes

   •  UK: Construction PMI likely to fall to 47.9 in June - TDS

   •  GBP/USD holds tightly to 10-day low ahead of UK Construction PMI, Carney’s speech

   •  GBP/USD analysis: UK data sent Pound diving

About the UK construction PMI

The PMI Construction released by the Chartered Institute of Purchasing & Supply and Markit Economics shows business conditions in the UK construction sector. It is worth noting that the construction sector does not influence, either positively or negatively, the GDP as much as the Manufacturing sector does. A result that values above 50 signals expansion (or is bullish for the GBP), whereas a result that values below 50 is seen as negative (or bearish).