The PMI was a market mover till December 2015. Moreover, Cable was the one who was more responsive to the manufacturing PMI release. However, the data lost relevance ever since Brexit fears began dominating the wires.
Strong data may not help Cable
In the current scenario, a better-than-expected data is irrelevant. This is because the reading would represent major part of the pre-referendum period (prior to last Friday). Things have changed significantly after Britons voted in favor of exit. Moreover, BOE’s Carney has hinted at a possibility of rate cut this Summer if the Brexit led slowdown in the UK economy is more than expected.
Hence, a strong data would be ignored, while a weaker-than-expected figure (below 50.1) would trigger speculation that the sector will suffer even more (courtesy of Brexit) in the coming months and thus increase odds of a BOE rate cut.
Consequently, a weak data could see GBP/USD drop below last Friday’s low of 1.3226.
Technicals remain in favor of a drop to 1.3226 as discussed in the London morning report titled "GBP/USD – Re-test of Friday’s low likely"