Sterling Weakens ahead of Various Key Economic Indicators, 20+ PIP Movement Likely; May 12, 2021
U.K. Prelim GDP q/q
U.K. has scheduled to release multiple key indicators at 0600 GMT/1130 IST. They are Prelim GDP q/q, Goods Trade balance, Industrial production as well as manufacturing Production data. GDP data is the broadest measure of economic activity and the primary gauge of the economy’s health. Same way, manufacturing production is a leading indicator of economic health – production reacts quickly to ups and downs in the business cycle and is correlated with consumer conditions such as employment levels and earnings. In case of Goods Trade balance, Export demand and currency demand are directly linked because foreigners must buy the domestic currency to pay for the nation’s exports. Export demand also impacts production and prices at domestic manufacturers.
Let’s see how GBP has reacted during the previous data release:
NOTE: Despite key economic data, sterling used to give very low volatility against major peers.
GBP/USD: The sterling trades marginally lower ahead of multiple key economic indicators. The pair made intraday high at $1.4146 and low at $1.4111 mark. Currently, a day as well as H1 chart with triple EMA suggests Up Trend for the time being. A sustained close above $1.4148 on H1 chart requires for the upside rally. Alternatively, a consistent close below $1.41 will check further supports.
Key Resistances: $1.4148, $1.4176, $1.42, $1.4224, $1.4252
Key Supports: $1.4100, $1.4076, $1.4040, $1.4002, $1.3974
Take a look and do trade wisely!