GBP/USD consolidates gains near 1.32, up more than 100 pips on week
|- Robust macroeconomic data from UK boosts the GBP.
- Easing concerns over hard-Brexit supports the pair's upside.
- DXY on track to close the week lower on tax-plan disappointment.
After advancing to its highest level at 1.3228 since the sharp sell-off witnessed after the BoE meeting earlier this month, the GBP/USD pair went into a consolidation phase and was last seen trading at 1.3195, up 0.35% on the day.
Industrial production gains momentum in UK
Today's data from the UK showed that the industrial production in September expanded by 0.7%, beating the market estimate of 0.3% and lifting the annual growth to 2.5%. Later in the day, the NIESR's 3-month GDP estimate improved to 0.5% from 0.4%. "If the economy continues to expand at this pace and inflation remains elevated, there is a case for the Bank of England to gradually raise the policy rate to stop the economy from overheating," the NIESR noted in its report.
- UK manufacturing production rises sharply in Sept, a big beat on expectations
- UK: GDP output expanded by 0.5% in the three months to October - NIESR
Meanwhile, providing the latest updates on Brexit negotiations, Michel Barnier, the EU's chief Brexit negotiator, said that the UK provided useful clarification on citizen rights and added that they were willing to reach an accord on an orderly Brexit. During the joint press conference, the UK's Brexit Secretary David Davis reiterated that they remained ready and willing to engage as often as needed ahead of the December EU summit.
The GBP strengthened against the shared currency as well on Friday, forcing the EUR/GBP pair to lose nearly 50 pips on the day.
On the other hand, despite a sharp increase witnessed in the US T-bond yields, the greenback is struggling to show resilience against its rivals as investors are waiting to see whether or not the corporate tax cut is going to be delayed until 2019 in the final form of the tax bill. At the moment, the DXY is losing 0.1% at 94.30.
Technical outlook
With a daily/weekly close above the critical 1.3200 psychological level, the pair could aim for 1.3270 (50-DMA) and 1.3320 (Nov. 1 high). On the downside, supports align at 1.3140 (100-DMA), 1.3040 (Nov. 3 low) and 1.3000 (psychological level).
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