UK industrial and manufacturing output exceeded expectations. Month over month, proudction rose 0.9%. Year over year it was +2.7%. UK industrial output was expected to advance by 0.3% in February after a smaller rise of 0.1% in January. Manufacturing production rose 1% m/m and 3.8%. The manufacturing component carried expectations for a rise of 0.3% as well, lower than 0.4% beforehand. All figures beat expectations.
Before the release, GBP/USD was riding higher on the greenback’s weakness and reached 1.6640. After the publication, cable extends its gains and breaks 1.67.
This is the parabolic move on the 30 minute chart:
Even though the pair was front running the move, the excellent figures enabled it to extend the gains rather than “sell the factâ€.
The UK economy has been advancing quite nicely in the past year, but it seems that growth is slowing down, and so has the GBP/USD rally. This is what last week’s PMIs have shown. This set of figures certainly gives sterling reasons to rise.
The Bank of England makes its rate decision later in the week, and no change is expected at this point. GBP/USD is capped by resistance levels of 1.668 and 1.6740. Support is found at 1.6618 and 1.6550.
For more, see the GBPUSD forecast.
