GBP/USD Plunges As UK Industrial Production Misses Expectations

FXOpen

The Great Britain Pound (GBP) extended downside movement against the US Dollar (USD) on Wednesday, dragging the price of GBP/USD to less than 1.6840 following the downbeat economic reports. The sentiment remains bullish due to Higher High in the recent upside rally.

Technical Analysis

As of this writing, the pair is being traded around 1.6831. A support may be noted around the current level, the 50% fib level ahead of 1.6741, the 61.8% fib level and then 1.6692, the swing low of the recent correction wave as demonstrated in the following chart.

cable

On the upside, the pair is likely to face a hurdle around 1.6913, the 38.2% fib level ahead of 1.7019, the 23.6% fib level and then 1.7191, the swing high of the recent upside rally. The sentiment will remain bullish as far as the 1.6463 support area is intact.

Industrial Production

The industrial production of Britain missed the expectations, printing 1.2% reading in June as compared to 2.3% in the month before against the median projection of 1.5%, a government report revealed today. Generally speaking, higher industrial production is considered positive for the economy, hence the downbeat economic report spurred selling pressure in the price of cable.

US Trade Balance

The US economy witnessed $41.54 billion trade deficit in June as compared to $44.66 billion trade deficit in the month before, a report by the US Bureau of Economic Analysis revealed today which exceeded the expectations of $40.77 billion deficit, accelerating the ongoing selling pressure in the price of GBP/USD.

Conclusion

Considering the overall technical and fundamental outlook, buying the pair around the current levels appears to be a good strategy if the price leaves a bullish engulfing or bullish pin bar on the daily chart. The trade should however be stopped out on a daily closing below the 1.6800 handle.

Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips. Open your FXOpen account now or learn more about trading forex with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Forex Analysis

Commodities and European currencies Test Key Supports EUR/USD Analysis: The Price Today Has Set Its Minimum Since the Beginning of March Market Analysis: GBP/USD Dives While USD/CAD Gains Bullish Pace The US Currency Corrects After Recent Growth USD/JPY Price Analysis: Consolidation ahead of US News

Latest articles

How Do Grid Trading Strategies Work?
Trader’s Tools

How Do Grid Trading Strategies Work?

Grid trading stands as a distinctive strategy within the trading realm, offering a structured approach to navigating market volatility. By strategically placing buy and sell orders at predefined intervals, this method eschews the need to determine the market direction, instead

Weekly Market Wrap With Gary Thomson: NIKKEI-225, USD/JPY, GBP/USD, USD/CAD, Gold
Financial Market News

Weekly Market Wrap With Gary Thomson: NIKKEI-225, USD/JPY, GBP/USD, USD/CAD, Gold

Get the latest scoop on the week's hottest headlines, all in one convenient video. Join Gary Thomson, the COO of  FXOpen UK, as he breaks down the most significant news reports and shares his expert insights.

  • NIKKEI-225 Analysis Indicates Possibility

Forex Analysis

Commodities and European currencies Test Key Supports

On the eve of the Easter holidays, the main currency pairs have slightly slowed down the development of the main trends and are consolidating near key ranges, the breakdown of which could provoke a change in the vectors of medium-term

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65.68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.