Global macro overview for 02/03/2016:
The PMI Manufacturing data from the UK was released yesterday and it was at a three-year low (50.8 vs. 52.3 expected and 52.9 prior). However, the PMI reading is still above the 50 mark that separates the economic contraction from expansion, but the overall trend for this index does not seems to be upward anymore. In conclusion, the UK manufacturing sector has been under pressure for months already as it was hit hardly by a slowdown in demand from major overseas economies like China (mainly due to a drop in new orders). Job cuts and a trim in goods prices did not make the situation any better as the manufacturing sector is slowly sliding towards recession.
Let us now take a look at the technical picture of the GBP/USD pair in the H4 time frame. After falling out of the brown channel, the market still trades below the important technical resistance at the level of 1.4058. Bears still have control over this market as the price approaches the important support at the level of 1.3836.