The British Manufacturing Production indicator provides analysts and traders with a snapshot of the health of the UK manufacturing sector. A reading which is higher than the market prediction is bullish for the pound.
Here are all the details, and 5 possible outcomes for GBP/USD.
Published on Thursday at 9:30 GMT.
Indicator Background
The British Manufacturing Production indicator measures the change in manufacturing output. As manufacturing makes up some 80% of total industrial production, the indicator is often a market-mover.
The indicator contracted by 0.2% last month, its second straight drop. The markets are expecting some improvement, with predictions for an increase of 0.3% this month. Will the indicator climb back into positive territory?
Sentiments and levels
2012 has been kind to the pound, with major gains against the dollar. With the US continuing to churn out favorable economic data, a rebound by the dollar may not be far off. Thus, the overall sentiment is neutral on GBP/USD towards this release.
Technical levels, from top to bottom: 1.6132, 1.6065, 1.60, 1.59, 1.5758, 1.57 and 1.55.
5 Scenarios
- Within expectations: 0.0% to 0.6%: In such a case, GBP/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 0.7% to 1.1%: An unexpected stronger reading could send the pair above one resistance line.
- Well above expectations: Above 1.1%: Given the recent downward trend of the indicator,chances of a sharp expansion are low. Such an outcome would prop up the GBP, and a second resistance line might be broken as a result.
- Below expectations: -0.4% to -0.1%: A sharper decrease than forecast could cause GBP/USD to fall drop below one level of support.
- Well below expectations: Below -0.4%: A reading well below zero would push the pair downwards, possibly breaking a second support level.
For more about the pound, see the GBP/USD forecast.
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