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GBP/JPY trading signal - UK Construction PMI - 03 Jul 2018

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Expiry Time: 
21:00 GMT
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The monthly PMI report from Markit for the UK is expected to be released for the construction sector today at 0930 GMT. According to the economists polled, the construction activity in the UK, as measured by the PMI is expected to remain subdued at 52.3. This marks a modest decline from 52.5 seen in the previous month.

Construction activity in the UK had remained steady at 52.5 for the past two months. This came following a decline in the index to below the 50-level. For the markets, a beat on the estimates today could potentially signal a rebound in the economic activity for the UK region.

This could potentially feed into the second quarter GDP data where economists hope that the UK's economy has rebounded following a 0.1% GDP growth registered in the first quarter.

With the relatively warmer weather and the fact that construction activity had picked up in the past two months, there is a strong chance for the UK's construction PMI to beat the estimates.

In May, the PMI activity in the construction sector continued to struggle with a decline in demand from the domestic market. This was largely attributed to slower than expected demand from the retail sector. However, this was offset by the good weather which helped to boost activity levels including catching up on backlog of orders from the previous months.

Based on the above, today's trading signal is GBPJPY, the currency pair has managed to post some modest gains but we expect to see some downside movement as well. The one-hour chart shows a bounce from 145.30 support which could send the pair to daily high 146.50. Following a brief retracement, we expect GBPJPY to close lower on the day.

gbpjpy trading signal 03 jul 2018

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion. All risks and coasts associated with online trading are your responsibility.