GBP/USD analysis: poor data arises doubts over Brexit consequences

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2673

The GBP/USD pair fell sharply hitting a daily low of 1.2569 in the American afternoon, after a series of disappointing releases in the UK. The big shock came from manufacturing output, sharply down in October by 0.9%, while Industrial production fell by 1.3%, the biggest fall in overall production in over three years, generating doubts on whether the UK economy will remain resilient to Brexit. The NIESR GDP estimate suggested that the UK grew by 0.4% in the three months to November, matching the previous three-month estimate. The pair recovered afterwards, but just enough to consolidate above the 1.2600 mark. From a technical point of view, the pair has found buyers around the 50% retracement of the 1.2387/1.2774 rally, triggered by news that the UK could avoid a "hard Brexit," but remains below the 38.2% retracement of the mentioned run at 1.2625, the immediate resistance, while the Momentum indicator keeps heading south within bearish territory, and the RSI indicator consolidates around 43, pointing to a downward extension, particularly on a break below the mentioned daily low.

Support levels: 1.2570 1.2525 1.2470

Resistance levels: 1.2625 1.2660 1.2700

View Live Chart for the GBP/USD

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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