UK house prices contracted in December, extending the weak trend across the sector. GDP data disappointed last week, but PM Johnson’s strong election victory is expected to place the economy on the growth track in 2020. The UK Manufacturing PMI slid farther into contractionary territory, followed by the Services and Composite PMI’s, but the GBPUSD remained strong. Will it maintain its uptrend after the release of US data? Subscribe to the PaxForex Daily Fundamental Analysis and grow your balance trade-by-trade.
Forex traders are now looking forward to PMI data out of the US to gauge if it follows global data to the downside or managed to finish 2019 strong. The Empire Manufacturing Index is expected to show a pick-up in the sector. What impact will it have on the GBPUSD? Will bulls push price action higher or can bears force a correction? Today’s fundamental analysis will take a look at price action in both directions.
Here are the key factors to keep in mind today for British Pound trades:
- UK Rightmove House Prices: UK Rightmove House Prices for December decreased by 0.9% monthly and increased by 0.8% annualized. Forex traders can compare this to UK Rightmove House Prices for November, which decreased by 1.3% monthly, and which increased by 0.3% annualized.
- UK Markit Manufacturing PMI: The UK Markit Manufacturing PMI for December was reported at 47.4. Economists predicted a figure of 49.2. Forex traders can compare this to the UK Markit Manufacturing PMI for November, which was reported at 48.9.
- UK Markit/CIPS Services PMI and Markit/CIPS Composite PMI: The UK Markit/CIPS Services PMI for December was reported at 49.0 and the UK Markit/CIPS Composite PMI was reported at 48.5. Economists predicted a figure of 49.5 and 49.5. Forex traders can compare this to the UK Markit/CIPS Services PMI for November, which was reported at 49.3 and to the UK Markit/CIPS Composite PMI, which was reported at 49.3.
Here are the key factors to keep in mind today for US Dollar trades:
- US Empire Manufacturing Index: The US Empire Manufacturing Index for December is predicted at 4.0. Forex traders can compare this to the US Empire Manufacturing Index for November, which was reported at 2.9.
- US Markit Manufacturing PMI, Services PMI, and Composite PMI: The Preliminary US Markit Manufacturing PMI for December is predicted at 52.6. Forex traders can compare this to the US Markit Manufacturing PMI for November, which was reported at 52.6. The Preliminary US Markit Services PMI for December is predicted at 52.0. Forex traders can compare this to the US Markit Services PMI for November, which was reported at 51.6. The Preliminary US Markit Composite PMI for December is predicted at 52.0. Forex traders can compare this to the US Markit Composite PMI for November, which was reported at 52.0.
- US NAHB Housing Market Index: The US NAHB Housing Market Index for December is predicted at 70. Forex traders can compare this to the US NAHB Housing Market Index for November, which was reported at 70.
- US TIC Data: US TIC Net Long-Term Transactions for October are predicted at $22.6B and US Total Net TIC Flows are predicted at $28.7B. Forex traders can compare this to US TIC Net Long-Term Transactions for November, which were reported at $49.5B and to US Total Net TIC Flows, which were reported at -$37.6B.
Should price action for the GBPUSD remain inside the or breakout above the 1.3300 to 1.3380 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.3335
- Take Profit Zone: 1.3515 – 1.3570
- Stop Loss Level: 1.3270
Should price action for the GBPUSD breakdown below 1.3300 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.3270
- Take Profit Zone: 1.3015 – 1.3055
- Stop Loss Level: 1.3300
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