The UK Economic Data Overview
The UK docket has the monthly GDP release today, alongside the releases of the Kingdom’s Trade Balance and Industrial Production, all of which will drop in at once later in Europe at 0930 GMT.
The United Kingdom GDP is expected to arrive at 0% MoM in November while the Index of Services (3M/3M) for November is seen steady at +0.2%.
Meanwhile, the manufacturing production, which makes up around 80% of total industrial production, is expected to drop by 0.2% MoM in November, deteriorating from a rise of 0.2% recorded in October. The total industrial production is expected to come in at -0.2% MoM in Nov as compared to the previous reading of +0.1%.
On an annualized basis, the industrial production for Nov is expected to have dropped 1.4% versus -1.3% previous, while the manufacturing output is also anticipated to have declined by 1.6% in the reported month versus -1.2% last.
Separately, the UK goods trade balance will be reported at the same time and is expected to show a deficit of £11.603 billion in Nov vs. £14.486 billion deficit reported in Oct.
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 around 20-pips in deviations up to + or -2, although in some cases, if notable enough, a deviation can fuel movements in excess of 60-70 pips.
How could affect GBP/USD?
At the press time, the GBP/USD extends the downside momentum amid increased dovish Bank of England (BOE) expectations, as the bears now attack the 1.30 handle heading into the critical UK macro releases.
According to FXStreet’s Analyst. Haresh Menghani: “From a technical perspective, nothing seems to have changed much for the pair and the near-term bias remains tilted in favor of bearish traders. This coupled with the fact that the pair has now found acceptance below the 23.6% Fibonacci level of the 1.3515-1.2905 recent downfall add credence to the negative outlook. Sustained weakness below the 1.30 handle will reaffirm the bearish bias and accelerate the slide further towards testing its next major support near the 1.2925 horizontal zone ahead of the 1.2900 round-figure mark.”
On the flip side, the 1.3100 round-figure mark now seems to have emerged as immediate resistance. Any subsequent recovery might now confront some fresh supply and remain capped near the 1.3130-35 confluence resistance – comprising of 200-hour SMA and 38.2% Fibo. Level”, Haresh adds.
About the UK Economic Data
The Gross Domestic Product released by the Office for National Statistics (ONS) is a measure of the total value of all goods and services produced by the UK. The GDP is considered as a broad measure of the UK economic activity. Generally speaking, a rising trend has a positive effect on the GBP, while a falling trend is seen as negative (or bearish).
The Manufacturing Production released by the Office for National Statistics (ONS) measures the manufacturing output. Manufacturing Production is significant as a short-term indicator of the strength of UK manufacturing activity that dominates a large part of total GDP. A high reading is seen as positive (or bullish) for the GBP, while a low reading is seen as negative (or bearish).
The trade balance released by the Office for National Statistics (ONS) is a balance between exports and imports of goods. A positive value shows trade surplus, while a negative value shows trade deficit. It is an event that generates some volatility for the GBP.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.