Morning Brief, Dec 10 – How to Trade GBP/USD on GDP and Manufacturing PMI?
Arslan Butt • 2 min read
- The dollar slid almost half a percent against the Euro and the Yen.
- US job growth plunged; unemployment rate held steady.
- UK GDP m/m remains in highlights during the London session.
- UK Manufacturing Production m/m will be in focus during the New York session.
On Monday, the Greenback slipped almost half a percent against the Euro and the Yen following weaker US payroll data. Weaker than expected nonfarm payroll fired speculation that the Federal Reserve may halt raising interest rates after raising it for the fourth time in December 2018.
GBP/USD – Triple Bottom Support & GDP Data, Perfect Setup
Today, trading the GBP/USD is all about fundamentals, such as GDP and Manufacturing PMI. Here’s what to expect:
GDP m/m: At 9:30 (GMT), the Office for National Statistics is due to release the GDP figure which is expected to rise by 0.1% vs. 0.0% in the previous month.
Considering the recent slowdown in the UK’s inflation figures from 2.6% to 2.5%, the market remains cautious over the GDP growth rate.
Manufacturing Production m/m – Fellas, the data is releasing together with GDP figures with a negative forecast of 0.0% vs. 0.2%. Manufacturing makes up around 80% of total Industrial Production and tends to dominate the market impact.
However, the real action begins tomorrow on December 11, (Tuesday) as the UK parliament will be voting on the proposed Brexit agreement. We need to be careful as most brokers may widen their spread and we may experience gaps and slippages on the news.
The idea is to trade the market only if both figures are positive or both are negative. Technically, the GBP/USD is likely to face a strong support near 1.2695, extended by the triple bottom pattern on the 4-hour chart.
Daily Technical Levels
Key Trading Level: 1.2764
GBP/USD – Market Sentiment
Weekly – Strong Sell
Daily – Strong Sell
Hourly – Sell
GBP/USD – Trade Plan
The idea is to stay bullish only above $1.2795 to target $1.2850. While selling is preferred on the bearish breakout of $1.2785.