Global macro overview for 02/11/2016:
The PMI Manufacturing data was released yesterday and it was slightly below market expectations. Overall manufacturing activity in the United Kingdom remained strong and according to Markit/CIPS report the Purchasing Managers' Index declined to 54.3 points in October, compared to the preceding month's upwardly revised 55.5 points. Meanwhile, market participants anticipated a slight drop to 54.6 during the reported period. Nevertheless, the British economy has performed better than expected so far despite the country's decision to leave the European Union. The UK economy is showing no signs of a widely expected immediate slowdown, which is why the Bank of England might not cut interest rates at its next meeting on Thursday, 3rd of November.
Let's now take a look at the GBP/USD technical picture at 4H time frame. The bulls have managed to break out above the important resistance at the level of 1.2333, but the market stays still inside the larger time frame trading range between 1.2027 and 1.2478. Only a sustained breakout above the level of 1.2478 and violation of the golden trend line resistance would change the current bearish outlook. Meanwhile, the GBP/USD pair is trading sideways.
