GBP/USD bounces off lows, still in red post-UK data

Haresh Menghani FXStreet

• UK manufacturing/industrial production beats estimates.
• Higher UK trade deficit offsets upbeat manufacturing data.

The GBP/USD pair maintained its offered tone for the second consecutive session, albeit managed to bounce off few pips from lows after mixed UK releases.

The pair managed to recover around 15-20 pips from the 1.3500 neighborhood and was being supported by the UK data that showed manufacturing production growth stood at 0.4% for November, better-than 0.1% recorded in the previous month and 0.3% expected.

Meanwhile, the overall industrial output also bettered expectations and posted m-o-m growth of 0.4%, with the yearly growth at 3.5% as against 2.8% expected.

The positive manufacturing data, to some extent, was negated by the UK goods trade balance data, which came in to show a larger-than-expected deficit of £12.23 billion for November (£10.70 billion expected) and did little to improve the already weaker sentiment, led by the UK political headwinds, surrounding the British Pound.

Later during the NA session, the US economic docket, featuring the release of import prices and final wholesale inventories data, would influence the US Dollar price dynamics and provide fresh short-term trading impetus.

Technical levels to watch

Any attempted recovery beyond the 1.3550-60 region could get extended but might continue to confront strong resistance near the 1.3600 handle. On the flip side, a decisive break below the 1.3500 handle might turn the pair vulnerable to accelerate the fall towards the 1.3400 mark with some intermediate support near the 1.3435-30 area.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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