The UK industrial and manufacturing output figures for the month of October are scheduled for release at 09.30 GMT in the European session ahead.
Industrial production likely to rebound in Oct
The manufacturing production, which makes up around 80% of total industrial production, is expected to come in a tad weaker at 0.5% on monthly basis in Oct, against a 0.6% increase seen in Sept. Meanwhile, the total industrial production is predicted to turn positive, and is expected to rebound 0.2% m/m in Oct, as compared to a 0.4% contraction recorded in the previous month.
The event may garner a lot of attention in absence of significant economic news for cable in the day ahead. On an upside surprise, GBP/USD could resume its bullish run and head for a test of 1.27 handle, while if the data falls short of expectations, then the major could drop sharply towards 10-DMA located just below 1.26 handle.
Deviation impact on GBP/USD
Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 20 and 35 pips in deviations up to 1.5 to -2.2, although in some cases, if notable enough, a deviation can fuel movements of up to 60 pips.
GBP/USD technical levels to watch
Haresh Menghani, Analyst at FXStreet noted, “Having faced rejection just below 100-day SMA resistance, the pair now seems to extend its reversal move further towards 1.2600 round figure mark support. Failure to defend 1.2600 handle is likely to drag the pair further towards its next support ear 1.2540-35 region representing 38.2% Fibonacci retracement level of 1.3439-1.1980 slide. A follow through selling pressure now seems to open room for further near-term depreciating move for the pair.
On the upside, any up-move might now confront strong resistance at 50% Fibonacci retracement level near 1.2700 region. A convincing move back above 1.2700 resistance now seems to provide the required momentum to lift the pair towards 100-day SMA resistance near 1.2790 region before the pair darts towards a short-term ascending trend-channel resistance near 1.2860-70 region, also coinciding with 61.8% Fibonacci retracement level.”
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