GBPUSD, Daily
Today’s worse than expected production and trade data which shows the industrial and manufacturing sector to be in more of a funk than thought. Cable has given back most of the gains seen during an earlier run higher to 1.4141, retreating back under 1.4090.
UK industrial output unexpectedly fell by 0.3% m/m and 0.5% y/y, down from the 0.2% and 0.1% respective growth rates of January. The median forecasts had been for a 0.1% m/m rise and a 0.0% y/y outcome. Manufacturing data were even worse, contracting 1.1% m/m, while the February trade report showed the visible goods deficit to be GBP 12.0 bln after an upwardly revised January deficit of GBP 12.2 bln. It’s been no secret that the production sector has been the weak spot of the UK’s economy, and more timely survey evidence suggests this is a worsening trend. The risk of Brexit is a factor at play. A survey published by Deloitte this week found that a “fog of uncertainty has descended on the corporate sector” as a consequence of uncertainty about EU membership.
The negative data adds to the already negative sentiment and although the Brexit premium is priced in the one thing that markets HATE more than anything else is uncertainty.
Sub 1.4000 looks probable, however there is support around Thursday’s close of 1.4050. 1.3900 and 1.3860 remain key downside targets in the longer term. Short term we have 1.4050 proving support on the 4 hour and Daily chart. The previous support at 1.1410 appears to have broken down earlier this week.
Preference remains for more SHORT positions below 1.4105-1.4112 level with T1 back to 1.4050 and T2 1.3962. On the upside the pair will need to break 1.4200 and 1.4260 for long positions to be considered.
Janne Muta
Chief Market Analyst
If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:
http://www.topforexbrokerscomparison.com
About Janne Muta, HotForex’s Chief Market Analyst
Janne Muta is a seasoned industry professional with over 16 years experience in the global markets. Originally from Finland, Janne has worked for institutions in both Helsinki and London as an institutional fund manager, global market analyst and FX educator.
Traders and fund managers from around the world have benefited greatly from Janne’s technical analysis methods. The indicators and price action based trading models he has developed, have, after rigorous testing, proven to be invaluable in identifying high probability trades.
“My mission is to help you to become a confident and successful trader”
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.