GBP/USD has started a new trading week mixed as volatility seems to have shifted from the previous week. Today the general market focus is upon data from UK. As elsewhere the news background is somewhat light
According to the information presented in the 4th quarter, UK GDP grew by 1.3% that is slightly lower than expectations. The data on industrial production turned out to be worse than the forecast as well, the volume fell by 0.5%, with the expected growth of 0.1%. December volume of production in GB manufacturing industry decreased by 0.7%, the forecast + 0.2%.
The lack of clear conditions for Brexit seriously slows down economic activity in the country exerting pressure for GBP. On this background, investors will pay even more attention to Brexit-related news, since only a solution to this problem will help the UK change the negative trend of economic indicators.
Later this week, other important economic indicators will come in market spotlight, which, in general, will complement the overall picture of UK economy state.
Mark Carney’s speech should take place on Tuesday, but his speech is unlikely to have a strong impact on trading. On Wednesday, traders' attention will be focused around the latest UK data on inflation.
Finally, on Friday, the market will monitor UK retail sales data, which will show consumers' mood in a situation of high uncertainty and the risks associated with Brexit.
On the chart, the price is now testing an important support level 1.2900, which keeps the price from further down move. Though the market is dominated by negative news background and weak economic data, the price so far is somewhat stable and keeps above 1.2900. Given this consideration we can expect some GBP/USD local pullback.