GBPUSD Movement
On Friday, GBP rose 0.28% against the USD and closed at 1.5634, as investors favoured the pound following a downbeat US employment data, thus dampening the demand prospect of the dollar. However, the latest batch of dismal economic releases from the UK capped the gains of the risk-on, pound.
In the UK, data showed that the nation’s total trade deficit surged to a level of £3.085 billion, surpassing analysts’ estimates for a deficit of £1.700 billion and compared to a £1.256 deficit registered in the previous month. Separately, data showed that the UK’s industrial production and manufacturing production rose 0.0% (MoM) and 0.2% (MoM), respectively, during July, failing to meet market expectation for a 0.1% and 0.3% rise. Meanwhile, the Bank of England, in its quarterly report, stated that its consumer inflation expectation for the next 12 months rose 3.2% following a 3.6% increase recorded earlier. Also, the NIESR GDP estimate for the UK economy edged up 0.9% during the three months ended to August, following a 0.7% rise registered in the previous month.
In the Asian session, at GMT0300, the pair is trading at 1.5644, with the GBP trading slightly higher from Friday’s close.
The pair is expected to find support at 1.5579, and a fall through could take it to the next support level of 1.5514. The pair is expected to find its first resistance at 1.5695, and a rise through could take it to the next resistance level of 1.5746.
Traders are expected to keep a close watch on the release of UK’s RICS housing price balance data, which analysts speculates to depict an improvement in the month of August.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
