GBP/USD analysis: hawkish Fed, poor UK data taking their toll

Valeria Bednarik FXStreet

GBP/USD Current price: 1.4168

UK data disappointed, but Pound held around 1.4200 anyway.
Dollar getting a boost from hawkish Minutes, but no fireworks.

The GBP/USD pair traded up to 1.4222, its highest for this April, in spite of another round of soft UK macroeconomic figures. Manufacturing Production fell by 0.2% in the month, while Industrial Production posted a tepid 0.1% advance, dragged lower by the construction sector. The Trade Balance for the same month showed that the total UK trade deficit for goods printing £10.200B. Finally, the NIESR GDP estimate for the three months to March came in at 0.2% vs. market´s forecast of 0.3%, while the previous month reading was revised to 0.1% from 0.3%. The data briefly interrupted Pound's rally and the pair fell to a daily low of 1.4160, where the pair bounced amid prevailing dollar's weakness. FOMC Minutes, however, sent the pair back to its daily lows, where the pair is ahead of the Asian opening. The technical outlook is still positive, despite the rally seems to have lost momentum, as the pair is in a consolidative stage after recovering roughly 230 pips from last week's low. In the 4 hours chart, the 20 SMA has partially lost its bullish strength but continues heading north below the current level, while technical indicators ease from overbought territory, rather reflecting the ongoing retracement than suggesting an upcoming slide. A break through 1.4244, the high established last March, would favor a rally up to 1.4345, the highest post-Brexit referendum, while the bullish potential will be neutralized on a break below 1.4115.

Support levels: 1.4150 1.4115 1.4080

Resistance levels: 1.4200 1.4245 1.4290

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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