GBP/USD: UK economic growth gains momentum in May: NIESR

GBP/USD: UK economic growth gains momentum in May: NIESR


GBPUSD

GBPUSD Movement

For the 24 hours to 23:00 GMT, the GBP rose 0.10% against the USD and closed at 1.3262, amid upbeat economic data.

Macroeconomic data indicated that UK’s trade deficit narrowed to £2.8 billion in May, compared to a revised trade deficit of £3.1 billion in the prior month. Markets were anticipating the country’s total trade deficit to widen to £3.4 billion.

Additionally, the NIESR estimated that Britain’s gross domestic product (GDP) rose 0.3% in the April-June 2018 period, compared to an advance of 0.2% in the January-March 2018 period.

Further, the nation’s manufacturing production rose 1.1% on an annual basis in May, compared to a revised advance of 0.9% in the preceding month. Markets had anticipated manufacturing production to advance 1.9%. Moreover, industrial production increased by 0.8% on an annual basis in May, less than market expectations for a rise of 1.9%. In the prior month, industrial production had advanced by a revised 1.6%. Also, construction output unexpectedly climbed 1.6% on an annual basis in May, defying market consensus for a drop of 0.5%. In the previous month, construction output had recorded a revised drop of 1.2%.

In the Asian session, at GMT0300, the pair is trading at 1.3262, with the GBP trading flat against the USD from yesterday’s close.

The pair is expected to find support at 1.3224, and a fall through could take it to the next support level of 1.3185. The pair is expected to find its first resistance at 1.3301, and a rise through could take it to the next resistance level of 1.3339.

Amid no major macroeconomic releases in the UK today, investors sentiment will be determined by global macroeconomic factors.

The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.

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