GBP/USD struggles to pull away from daily lows, stays below 1.34
- Industrial and manufacturing production in the UK shows a contraction in April.
- NIESR GDP estimate falls short of market expectations.
- DXY stays flat near mid-93s.
The GBP/USD pair dropped to a daily low at 1.3345 in the European morning and is now having a difficult time making a decisive recovery as the disappointing macroeconomic data releases from the UK don't allow the GBP to find demand As of writing, the pair was trading at 1.3375, losing 0.22% on the day.
The first data set from the UK showed that the industrial production and manufacturing production contracted by 0.8% and 1.4% respectively for the month of April and the trade deficit increased to 5.28 billion GBP to miss the market expectation of 2.5 billion GBP. Later in the day, according to the report published by the National Institue of Economic and Social Research, the GBP growth for three months ending in May 2018 is expected to be 0.2%, slightly below the experts' estimate of 0.3%.
"Economic growth has slowed materially since the start of this year and it continues to remain weak," the report read.
Meanwhile, a recently published article by the Financial Times claimed that the UK would apply to stay in European standards system after the Brexit is finalized.
On the other hand, the US Dollar Index which was able to advance to 93.70 earlier in the day, is now moving sideways a little above mid-93s, virtually staying unchanged for the day. With no important macroeconomic data releases from the US, the index is unlikely to make sharp fluctuations in the remainder of the day.
Technical outlook
The immediate support for the pair aligns at 1.3360 (20-DMA) ahead of 1.3300 (psychological level) and 1.3205 (May 29 low). On the upside, resistances align at 1.3470 (Jun. 7 high), 1.3500 (psychological level) and 1.3600 (50-DMA).