“¢ Disappointing UK manufacturing/industrial production data prompts some fresh selling.
“¢ In line UK GDP growth figures offset by resurgent USD demand and do little to lend any support.
The GBP/USD pair extended its post-UK data rejection slide from the 1.3300 handle and is currently placed near the lower end of its daily trading range.
Today’s disappointing UK economic data – manufacturing/industrial production and larger than expected UK goods trade deficit figures, which largely offset in line UK monthly GDP growth figures, was seen as one of the key factors prompting some fresh weakness around the British Pound.
This coupled with a goodish pickup in the US Dollar demand, supported by an uptick in the US Treasury bond yields, exerted some additional downward pressure and further collaborated to the pair’s slide back towards early European session lows.
Despite a decent pull-back, the pair has managed to hold comfortably above the 1.3200 handle and overnight swing lows touched in the aftermath of Boris Johnson’s resignation as Foreign Minister. Hence, it would be prudent to wait for a follow-through selling before confirming that the pair might have actually topped out in the near-term.
Technical Analysis
The pair has been recovering from YTD lows alongside an ascending trend-line on the 4-hourly chart. The mentioned support, currently near the 1.3200 handle, now coincides with 50-period SMA on the said chart and might continue to act as immediate strong support to defend.
Spot rate: 1.3238
Daily High: 1.3301
Daily Low: 1.3223
Trend: Neutral
Resistance
R1: 1.3273 (50-period SMA H1)
R2: 1.3301 (current day swing high)
R3: 1.3362 (50-day SMA)
Support
S1: 1.3200 (ascending trend-line)
S2: 1.3179 (S1 daily pivot-point)
S3: 1.3145 (horizontal zone)
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