GBP/USD Attempting to Extend its Recovery Above 1.4400 Level
pair reversed from session high of 1.4467 and dropped to 1.4394 on weak
production data, before recovering back to currently trade at 1.4430
Adding to the recent slew of weak PMI readings, UK manufacturing and industrial production printed softer-than-expected reading. The UK manufacturing production for the month of March came-in at +0.1% as against expected +0.4%, while industrial production printed +0.3% vs +0.5% expected. Although the reading fell short of expectations, the reading were still better than previous months decline of 1.1% and 0.3% respectively.
The intraday reversal happened from a short-term descending trend-channel resistance. The pair, however, managed to hold and rebound from an important support near 1.4390-85 area, marking 50% Fibonacci retracement level of 1.4009-1.4770 upswing. A follow through buying interest that could provide the required momentum to lift the pair beyond trend-channel resistance would now open room for further appreciation in the near-term.
Technical levels to watch
A clear break-through above the trend-channel resistance near 1.4465-70 area, leading to momentum above weekly highs resistance near 1.4480, now seems to accelerate the up-move beyond 1.4500 psychological mark, towards its next major resistance near 1.4530-35 horizontal zone.
On the flip side, inability to clear an immediate hurdle and a subsequent weakness back below 1.4400 handle has the potential to drag the pair further, initially towards 100-day SMA intermediate support near 1.4365 and eventually towards an important confluence support near 1.4325 level. This 1.4325 confluence support comprises of 50-day SMA and the trend-channel support.