CBI data showed boost in exports
· According to the CBI data released on October 24, manufacturing orders from foreign customers hit their highest level in two and a half years in October, with a reading of +8.
· Furthermore, export orders were flat in the quarter, the first time they have not fallen since mid-2014.
· However, domestic orders dropped from the previous quarter’s reading of +11 in July to +5 in October.
· Overall, the CBI data suggest the manufacturing PMI could print in line with estimates. The risk if any is on the higher side.
Strong data could trigger a sharp rise in the Pound
BOE is widely seen keeping rates unchanged on Thursday and revise and growth forecasts higher. Moreover, the rate cut bets have gone out of the window. A strong manufacturing PMI data would only add credence to hawkish expectations and thus end up sending Pound higher across the board. On the other hand, a surprisingly weak data could yield a revisit to 1.2144-1.21 levels.
Technicals – Falling could be breached
The pair has managed to hold above 1.21 handle despite repeated selling above 1.23 handle throughout the last month. Consequently, a technical correction could take the prices above the descending resistance.
A daily end close above the falling would open doors for 1.25 levels.
On the other hand, a day end close below 1.21 would signal a fresh sell-off to sub 1.20 levels.