GBP/USD Forecast: pressuring weekly lows on soft UK data
|Worst-than-expected UK data sent the Pound to the 1.2430 region against its American rival, not far from the weekly low set at 1.2418. In February, manufacturing production fell by 0.1, monthly basis, ending up 3.3% when compared to a year earlier, while industrial production fell by 0.7% in the month, against expectations of a 0.2% advance. Also, the deficit on trade in goods and services widened to £3.7 billion in February from a revised deficit of £3.0 billion in January. Still pending of release is the NIESR GDP estimate for the three months to March.
Further dollar gains will depend on the outcome of the US Nonfarm Payroll report, expected to indicate that the country added 180K new jobs in March. As usual lately, much of the attention will be placed in wages' growth, particularly if the headline reading comes in line with expectations.
The technical picture for the pair is bearish, but of course, is on Payrolls' outcome the next move. In the 4 hours chart, the price is around the 38.2% retracement of the January rally, below a bearish 20 SMA and with technical indicators heading south below their mid-lines. 1.2410 is the immediate support, ahead of 1.2370. Below this last, 1.2310/30 is the next bearish target.
A recovery beyond 1.2460 exposes 1.2500, while beyond this last, the pair can rally up to the 1.2540/60 region.
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