© Dukascopy Bank
After two consecutive "red days", when GBP/USD did not manage to break the weekly average price of 1.53, the pair received a boost in the middle of the week. Overall, throughout the previous five trading days the single currency gained almost 2% versus the American currency and touched two-week highs at 154.597 on Friday, October 11. The Sterling has been spurred by the release of strong UK industrial production data. According to the Office for National Statistics, the UK industrial production increased 1.0% from a month earlier, well ahead of expectations for a 0.3% increase. Moreover, industrial output added 1.9% compared to the preceding year, and taking into account expectations for a 1.2% increase. However, the UK posted a larger trade deficit than expected in August, while construction activity fell 4.3%, showing the fastest pace of contraction since 2012. The strong British currency and slowing global growth may raise the likelihood that the Bank of England will maintain low interest rates longer.
Compared to the EUR/USD pair, Community members are similar in their forecasts and are expecting the pair to follow the upward trend as well as to close at 1.543 by Friday, October 16. "There are some very strong bullish signs on four-hour time-frame thus I will expect bearish reversals. If the price break through successfully on the daily time-frame, that will be a sign that bullish intermediate trend can continue." said csan86.
Meanwhile, there is going to be a relatively rich week in the UK in terms of fundamentals. On Tuesday, the data on consumer prices is going to be announced while the next day, will be published monthly employment report. Meanwhile, the US is to round up the week with data on consumer sentiment, and industrial production.
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