For the 24 hours to 23:00 GMT, the GBP declined 0.64% against the USD and closed at 1.2886 on Friday, following dismal economic data in the UK that offered multiple signs of slowdown in Britain’s economic momentum.
Data indicated that UK’s industrial production unexpectedly dropped 0.1% MoM in May, defying market expectation for a rise of 0.5% and compared to an advance of 0.2% in the prior month. Further, the nation’s manufacturing production surprisingly eased 0.2% on a monthly basis in May, confounding market consensus for a rise of 0.5%. Manufacturing production had advanced 0.2% in the prior month. Additionally, the nation’s construction output unexpectedly declined 1.2% MoM in May, compared to market expectations for an advance of 0.7% and following a revised fall of 1.1% in the previous month.
Moreover, the nation’s total trade deficit widened more-than-expected to a level of £3.1 billion in May, following a revised deficit of £2.1 billion in the prior month. Markets were expecting the nation’s total trade deficit to rise to a level of £2.5 billion. Also, the nation’s Halifax house price index recorded an unexpected drop of 1.0% in June, declining for the first time in 5 months and compared to a revised advance of 0.3% in the previous month. Markets were expecting the index to climb 0.2%.
On the other hand, NIESR estimated that UK’s gross domestic product (GDP) climbed 0.3% in the three months to June 2017. NIESR estimated UK’s economy expanded 0.2% in the March-May period.
In the Asian session, at GMT0300, the pair is trading at 1.2896, with the GBP trading 0.08% higher against the USD from Friday’s close.
The pair is expected to find support at 1.2851, and a fall through could take it to the next support level of 1.2805. The pair is expected to find its first resistance at 1.2958, and a rise through could take it to the next resistance level of 1.3019.
The currency pair is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.