• NIESR GDP estimates add to weakness led by disappointing UK production data.
• Softer US CPI print prompts some fresh USD weakness and helps limit downside.
• Investors now look forward to the latest FOMC minutes for fresh impetus.
The GBP/USD pair extended its retracement slide from over 2-week tops and refreshed session lows in the last hour, albeit quickly recovered few pips thereafter.
Against the backdrop of today's disappointing UK manufacturing/industrial production data, the pair lost some more ground after the NIESR, in its latest report, estimated a 0.2% UK GDP growth during the first quarter of 2018.
The pair dropped to an intraday low level of 1.4161 but managed to find some support amid persistent US Dollar selling bias. The greenback held on to its weaker tone and weakened further following the release of softer US CPI, which came in to show an unexpected drop in consumer prices in March.
The pair now seems to have stabilized near the 1.4175-80 region as investors now look forward to the release of minutes from the last FOMC meeting, which might help determine the next leg of directional move.
Technical outlook
Yohay Elam, FXStreet's own Analyst writes: “The $1.4170 level is the confluence of several technical levels: the SMA200-15m, the SMA50-1h, the 15min, 1h lows, the 4h high, the Fibonacci 38.2% one day, the Fibo 23.6% one-day, and the Bolinger Band 1h Lower (Stdv 2.2). Further below support awaits around $1.4080 where we find a congestion of the following levels: the Fibo 161.8$ one day, SMA200-1h, SMA50-4h, the SMA10-1 day, Fibo 23.6% one week and more.”
“Resistance is at the round number of $1.4200, where we find the SMA10-15m, the SMA50-15m, the SMA10-1h, the one day high, the SMA-5 1hv, and the Pivot Point one-week R2. Even higher, $1.4275 features the PP one month R1, the PP 1d R3, and the Pivot Point one-week R3.”
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