GBPUSD Movement
For the 24 hours to 23:00 GMT, the GBP declined 0.98% against the USD and closed at 1.3806 on Friday, after comments from the European Union’s (EU) chief negotiator sparked a fresh wave of uncertainty over Britain’s exit from the EU.
The EU’s chief negotiator, Michel Barnier, warned that a Brexit transition deal may not be in reach for the moment.
Losses in the Pound were extended, after data revealed that UK’s industrial production retreated more-than-anticipated by 1.3% on a monthly basis in December, dropping by the most since September 2012, amid a temporary closure of Britain’s most important pipeline. Industrial production had posted a revised rise of 0.3% in the previous month, while markets were expecting for a fall of 0.9%. Further, the nation’s total trade deficit surprisingly widened to £4.90 billion in December, following a revised deficit of £3.65 billion in the previous month. Markets were anticipating the nation to register a total trade deficit of £2.40 billion.
On the contrary, the nation’s manufacturing production grew 0.3% on a monthly basis in December, meeting market expectations. In the previous month, manufacturing production had risen by a revised 0.2%. Moreover, the nation’s construction output recorded an unexpected rise of 1.6% MoM in December, driven by an upturn in infrastructure projects. Construction output had registered a revised rise of 0.1% in the prior month, while investors had envisaged for a fall of 0.1%.
In other economic news, leading think tanker, NIESR estimated that UK’s gross domestic product (GDP) advanced 0.5% in the three months to January, at par with market expectations and compared to a rise of 0.6% in the October-December 2017 period.
In the Asian session, at GMT0400, the pair is trading at 1.3861, with the GBP trading 0.4% higher against the USD from Friday’s close.
The pair is expected to find support at 1.3755, and a fall through could take it to the next support level of 1.3649. The pair is expected to find its first resistance at 1.3977, and a rise through could take it to the next resistance level of 1.4093.
With no macroeconomic releases in Britain today, investor sentiment would be governed by global macroeconomic events.
The currency pair is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.
