GBPUSD Signaling Bullish Continuation13 May, 2015 by Aayush Jindal in Fundamental Analysis, Market Analysis
- British Pound rocketed higher against the US Dollar, as the UK Industrial Production report came above the forecast.
- UK Industrial Production released by the National Statistics registered a rise of 0.5% in March 2015, compared with the forecast of no change.
- UK Manufacturing Production also posted a higher reading, as it rose by 0.4%.
UK Industrial Production
Today in the UK, the Industrial Production report, which measures outputs of the UK factories and mines was released by the National Statistics. The market was not expecting any change in April 2015, compared to the preceding month. However, the outcome was above the forecast, as the UK Industrial Production managed to gain by 0.5%, which was also above the last increase of 0.1%.
When we consider the year-over-year change, then the Industrial Production gained by 0.7% in April 2015, compared to the same month a year ago whereas the expectation was a 0.2% rise. The report stated that the “largest contribution to the quarterly growth came from electricity, gas, steam & air-conditioning output, which increased by 2.7%”.
Moreover, the Manufacturing Production was also above the forecast, as it increased by 0.4% in April 2015, compared to the preceding month. When we consider the year-over-year change, then the Manufacturing Production rose by 1.1% in April 2015, compared to the same month a year ago whereas the expectation was a 1% increase.
Overall, the outcome was above the forecast, and helped the GBPUSD pair to retain ground.
GBPUSD – Technical Analysis
The British Pound spiked higher today versus the US Dollar to trade near the 1.5700 resistance area. There is an impressive bullish run underway for GBPUSD, as buyers managed to take the pair higher in the recent times by more than 300 pips.
However, the pair is in the overbought territory now, which means it might correct a bit from the current levels. There is a support trend line formed on the hourly chart of the pair, which is coinciding with the 50-61.8% fib retracement level of the last leg from the 1.5353 low to 1.5709 high.
The pair is well positioned above the 100 and 200 simple moving averages, which suggest strength in GBPUSD in the near term.