Global macro overview for 05/01/2017:
The Chartered Institute of Purchasing and Supply (CIPS) Construction Purchasing Manager's Index (PMI) data from the United Kingdom has beaten market expectations.The activity level of purchasing managers in the construction industry rose to the level of 54.2 points, while market participants expected a slight decrease to 52.6 points from 52.8 points a month ago. Moreover, the report reveals that this growth accelerates for the third straight month to 17-month high. New business increases at the fastest rate since July 2015 and output price inflation hits a 68-month record high. In conclusion, UK service sector ends 2016 with strong expansion and adds another good bunch of data to the overall good economic situation of the post-Brexit economy.
Let's now take a look at the GBP/USD technical picture in 4H time frame. The price is still hovering around the dashed black trend line, just in the middle of the trading range, as the market reaction for the news release was somewhat muted so far. The next support is seen at the level of 1.2200 and the next technical resistance is seen at the level of 1.2387.
