Whether the pair extends gains or falls back below 1.25 as it has done so many times last month partly depends on the UK manufacturing PMI report.
The data is expected to show the pace of expansion in the manufacturing activity remained unchanged at 54.3 in November.
Export orders may play spoil sport
The Industrial Trends survey released on November 22 had pointed to an improvement in the manufacturing order books, but a slowdown in export order books and output growth.
The survey said “16% of firms said their export order books were above normal, and 27% said they were below normal, giving a balance of -11%. November’s level dropped on the previous month (-6%), but remained well above average (-19%)”.
Consequently, the odds of the manufacturing PMI missing estimate largely due to a drop in the export orders cannot be ruled out.
The survey data released on November 22 had weighed over the GBP/USD pair. Thus, a slight miss on the manufacturing PMI may not be a big deal.
On the contrary a better-than-expected number could send the pair higher to 1.26 levels.
Technicals – eyes 1.26 handle
Pair’s rebound from the rising support on Tuesday followed by a daily close above the stiff resistance of 1.25 on Wednesday suggests the pair is likely to extend gains to 1.26-1.2630 levels.
On the lower side, only a daily close below the rising would signal the doors are open for a drop to 1.2301 levels.