Global macro overview for 02/06/2017:
Purchasing Manager's Index (PMI) by the Chartered Institute of Purchasing and Supply (CIPS) Construction from the UK surprised market participants. Investors expected a worse PMI in the construction sector at 52.7 points from 53.1 points, but the print revealed was at the level of 56.0 points. This is another set of a good data from the UK that was released this week and the biggest contributor was the housing market. The residential work replaces civil engineering as the best performing category. The latest survey also revealed a sustained recovery in new construction work, following the soft patch sawn during the first quarter of 2017.
Interestingly, the fresh score is the highest level since January 2016. Let's not forget that a reading above 50 indicates expansion in the construction industry; a reading below indicates contraction. It indicates health of the construction section in the UK. Moreover, Construction PMI is a leading indicator of overall economic performance, so it can give an early glimpse of the economic conditions.
Let's take a look at the GBP/JPY technical picture on the H43 time frame. The price failed to break out above the golden channel upper trend line and now the market is reversing. The overall reaction for data is muted amid expectations for data from the US labor market. The next support is seen at the level of 143.08 and the next resistance is seen at the level of 144.05.
