UK Manufacturing Production, a key indicator, provides analysts and traders with a snapshot of the strength of the UK manufacturing sector. A reading which is higher than the market forecast is bullish for the pound.
Here are all the details, and 5 possible outcomes for GBP/USD.
Published on Wednesday at 9:30 GMT.
Indicator Background
The British Manufacturing Production indicator measures the changes in output produced by manufacturers and in the turning of inventory. Manufacturing is a critical sector of the economy, and strong readings are an indication of economic growth.
The indicator has been struggling, posting three consecutive declines, all of which missed expectations. The markets are expecting an improvement in the January report, with an estimate of 0.2%.
Sentiments and levels
The Federal Reserve is unlikely to raise rates in March, but the bias remains towards tightening. This monetary divergence favors the US dollar. Although the US economy has experienced a soft start to 2016, the employment picture is solid, and the most recent Nonfarm Payrolls report was well above expectations. So, the overall sentiment is bearish on GBP/USD towards this release.
Technical levels, from top to bottom: 1.4562, 1.4346, 1.4227, 1.4148, 1.40 and 1.3901.
5 Scenarios
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