If the data exceeds the forecast, then GBPUSD grows and vice versa.
The industry PMI Index from Markit is the second most important among its counterparts in the sectors: construction and services, which also represent their similar PMI indices. It is created at the level of surveys of managers of key companies in the industry, which makes it possible to call it leading, as it reflects the expectations and moods of key players.
There is one feature for this indicator: the sensitivity of the market to this indicator depends on the distance between the actual data and the psychological limit line of the indicator, which is set at the level of 50. The indicator below 50 indicates pessimism of business. The lower the indicator, the worse the situation. The data above 50, on the contrary, indicates optimism and the higher, the better.
Good trading on this indicator can be at the moment of crossing the psychological limit line. The further we move away from the limit line up or down, the less interest the market will have to this release.
We can assume that the extreme points of interest of the market can be +/- 5, that is, 45 and 55, beyond which it is worth increasing triggers for trading deviations, since the GBPUSD reaction will be less and less pronounced, but namely these levels should also tell you about the need for additional structuring of triggers for trading.
It is important to understand that if we are at level 45, then we can sell with a small trigger -1 since pessimism is aggravated. It is not worth buying because even +2 will not bring 45+2 (47) to the optimism limit line (50). On the other hand, if we are gradually growing from the bottom up, for example, there are publications with 43, then with 45.2, then with 46.9, this can already be a positive trend and the interest in purchases returns. The pound's reaction returns up, as well, despite the “zone of pessimism” of the indicator.
In general, this is a simple indicator, but as you can see, it has its own highlight, which should not be overlooked.