GBPUSD Movement
For the 24 hours to 23:00 GMT, the GBP declined 1.39% against the USD and closed at 1.2438 on Friday, after UK’s industrial production unexpectedly fell by 0.4% MoM in August, defying market expectations for a rise of 0.2% and compared to a gain of 0.1% in the prior month. Also, the nation’s total trade deficit widened more-than-expected to a level of £4.7 billion in August, compared to a revised deficit of £2.2 billion in the prior month while markets anticipated the nation to post a deficit of £4.0 billion. Meanwhile, the nation’s manufacturing production rebounded less-than-expected by 0.2% MoM in August, against market expectations for an advance of 0.4% and following a drop of 0.9% in the prior month. Moreover, the NIESR estimated that UK’s gross domestic product (GDP) grew by 0.4% QoQ in the July-September 2016 period, after recording a revised rise of 0.5% in the previous quarter. Further, the nation’s Halifax house price index unexpectedly advanced by 0.1% on a monthly basis in September, recording its first increase since June 2016, compared to market expectations for a flat reading. In the previous month, the Halifax house price index had dropped by a revised 0.3%.
In the Asian session, at GMT0300, the pair is trading at 1.2409, with the GBP trading 0.23% lower against the USD from Friday’s close.
The pair is expected to find support at 1.2263, and a fall through could take it to the next support level of 1.2116. The pair is expected to find its first resistance at 1.2516, and a rise through could take it to the next resistance level of 1.2622.
Going ahead, market participants would await the release of UK’s BRC retail sales for August, due to release overnight.
The currency pair is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.
