Global macro analysis for 05/07/2016:
The Construction PMI data from the UK was revealed yesterday and it widely disappointed the market participants. According to the data, June was the worst month in seven years since construction PMI entered a contraction territory. The Construction PMI for the month of June was at the level of 46, 5.2 lower than a month ago and 4.6 points below the market expectations. Moreover, the following number was the first reading below 50.0 marks since April 2013. The main reason for the decline is a big drop in residential building and reduction in commercial work. In conclusion, the construction sector in the UK is sliding into recession and there are strong expectations of a further decline in next month's data.
Let's now take a look at GBP/USD technical picture in the 4H time frame. Without any doubt, bears are in control over this market, but the first signs of the looming bullish divergence between the price and momentum oscillator are visible. Nevertheless, the key level to the upside is still the technical resistance at the level of 1.3562.
