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UK Data smashed Expectations

Market Analysis

EURGBP, H1             

UK production and trade data smashed expectations in December data. Industrial output rose 1.1% m/m and by 4.3% y/y, up from respective growth figures of 0.8% and 3.3%, both of which were revised up by 0.1 of a percentage point. The median forecasts had been for a 0.2% m/m contraction and 3.2% y/y growth. The narrower manufacturing production figure surged to a growth rate of 2.1% m/m and 4.0% y/y, accelerating from the respective month-prior figures of 1.4% m/m and 1.7% y/y, which were also revised up and were also well up on the median forecasts. December trade figures revealed a narrowing in the overall deficit to GBP 3.3 bln from GBP 3.6 bln, which was itself revised up from a deficit of GBP 4.2 bln. The median forecast had been for a deficit of GPB 3.5 bln. No sign of Brexit blues here, and sterling and UK sovereign yields rose on the data.

On the 1 hour chart EURGBP broke the crossing 30 and 50 period moving averages earlier, while MACD, RSI and ADX remain neutral, with MACD below zero and negative, RSI is 43 and falling, and ADX lines are below the crucial level of 25. Therefore the 50-period moving average, around 0.8525, remains strong resistance from earlier this morning.

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Andria Pichidi

Market Analyst

HotForex

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