FXStreet (Mumbai) - The GBP/USD pair finally managed to take out its hourly 200-MA at 1.4259 after grappling with the same in the early European session. The spot; currently around 1.4270; is now looking northwards, although bulls remain cautious after Friday’s sharp fall.

Weak export orders could hurt PMI

The Confederation of the British Industry (CBI) total trends survey released last week showed the weak export sector led to a sharp drop in the order book with the British manufacturers. The order book balance of the survey dropped to -15 percent in January from -7 percent in the previous month. Hence, the headline figure may miss estimate of 51.8 due to a drop in the new export orders inflow.

However, the survey survey was conducted among manufacturers between December 17 and January 13 and received 465 responses. Hence, the PMI may print higher than estimates if the order book improved in the later half of the month – Jan 14 to Jan 31; a time-frame which was not covered by the CBI data.

A better-than-expected figure could help the Pound retake 1.43 handle. Further gains appear difficult given the odds are getting stacked against the BOE rate hike each passing day. Meanwhile, a weaker-than-expected PMI could see Sterling revisit 1.42 levels.

GBP/USD Technical Levels

The immediate resistance is seen at 1.4287 (5-DMA), ahead of the major rising trend line resistance seen on the hourly chart at 1.4310. A break higher could see the pair test offers around 1.4351 (23.6% of 1.5230-1.4079). Moreover, the area around 1.4350 has acted as a strong resistance during the last week.

On the other hand, a failure to sustain above the hourly 200-MA at 1.4258 could see the pair revisit the psychological level of 1.42. A break lower could happen if the headline PMI dips below 50.00; as that would be its multi year low. Below 1.42, the spot could re-test 1.5149 (Friday’s low).