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GBP/USD Bullish Correction In Play - Update on a Sell Limit! 

EagleFX

During Friday's European trading hours, the GBP/USD currency pair succeeded in stopping its previous 2-day losing streak and rose to the intra-day high at around 1.2645, despite the terrible UK growth and industrial numbers. However, the reason for the currency pair gains could be attributed to the broad-based US dollar fresh selling bias triggered after some stability came in the global financial markets.

Currently, the GBP/USD is trading at 1.2637 and consolidating in the range between 1.2546 and 1.2645. However, the gain in the currency pair could be short-lived or temporary due to shaky market sentiment. At the data front, the Office for National Statistics (ONS) announced the UK industrial and manufacturing production data on Friday, as the overall industrial sector contraction declined sharply in April.

Manufacturing output came at -24.3% MoM in April against -15.8% expectations and -4.6% booked in March, and In the meantime, the total industrial output reached -20.3% against. -15.0% expected and -4.2% last. Annually, the UK manufacturing production figures reached -28.5% in April and ignored expectations of -19.9%. Total industrial output fell 24.4% in April, vs. -19.3% figures expected and the previous -8.2% print.

While introducing the Gross Domestic Product, the report is usually released by the Office for National Statistics (ONS), which highlights the total worth of all goods and services manufactured by the United Kingdom. The GDP is known as a major measure of UK economic activity. Generally, a rising trend has a positive (bullish) effect on the GBP, while a falling trend is seen as negative (or bearish).

At the USD front, the broad-based US dollar erased its early session gains and edged down due to the goodish rebound in the US equity futures and turned out to be one of the key factors that kept the currency pair higher. However, the fading hopes for a sharp V-shaped recovery from the coronavirus pandemic and fears of a second wave of coronavirus outbreak will keep a lid on any additional losses in the currency pair.


Daily Support and Resistance

S1 1.2577

S2 1.2668

S3 1.2706

Pivot Point 1.2759

R1 1.2797

R2 1.2851

R3 1.2942

The GBP/USD pair is trading with a bullish bias at 1.2640 level, holding right above 1.2550 support level. Recently, the oversold pair has made a bullish movement and has already crossed over the 50 periods EMA at 1.2620 level. The RSI is still holding below 50, but its direction is bullish, so we may enter into a further bullish trend as soon as the RSI crosses 50 upward. On the higher side, the resistance level stays at 1.2759 level today. Let's look for bullish trades over 1/2550 level. Good luck!

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