UK manufacturing and industrial production continued to contract in June amid Britain's decision to leave the European Union, official data from the Office for National Statistics (ONS) revealed on Tuesday. Manufacturing output dropped 0.3% on an annual seasonally adjusted basis in June, while market analysts expected the indicator to come in at 0.0%. Meanwhile, May's figure was revised down to a 0.6% decline from an originally reported 0.5% fall. On an annual basis, Britain's manufacturing production rose 0.9% in the same month, compared to May's upwardly revised reading of 1.7%. Furthermore, the data showed that overall industrial production grew 0.1% month-over-month on a seasonally adjusted basis in June, following the previous month's downwardly revised drop of 0.6%. Economic desks anticipated a 0.1% fall in the sixth month of the year. Year-over-year, industrial output increased 1.6% in the reported month, compared to May's 1.4% hike.
Other data released by the ONS showed that the country's trade deficit widened more than expected in June. The UK's trade gap rose to $12.4 billion in the reported month, compared to last month's upwardly revised gap of $11.5 billion, while economists expected to see a $9.6 billion deficit in June.
US Monthly Budget Statement is the only significant event today
GBP/USD finds support at 1.30
Having slumped for the fifth time in a row, the Cable still managed to remain above the 1.30 handle on Tuesday. Investors appear to be taking profit after the plunge, but the 1.31 mark is still a difficult goal to achieve. However, the nearest resistance is still located around 1.3165, represented by the 20-day SMA, the weekly and the monthly PPs. Meanwhile, the 1.30 level is being bolstered by the weekly S1 and the Bollinger band, contributing to the Sterling's rebound today. Nevertheless, risks of intraday gains being erased persist, which could result in a further decline below 1.30, as technical indicators retain mixed signals.
Daily chart
Hourly chart
Still no consensus
Sentiment is mostly neutral, as bulls are outnumbering the bears by only 4% points. The share of sell orders increased from 62 to 64%.
Indecision appears to be widespread, as the same neutral sentiment is observed among the traders of other brokers. At OANDA, 56% of positions are long and 44% are short. The sentiment at Saxo Bank reached a perfect equilibrium, as the numbers of longs and shorts each take up 50% of the market.
Spreads (avg, pip) / Trading volume / Volatility
Majority sees GBP/USD below 1.30 in three months
More than half of traders (51%) believe the British currency is to cost 1.30 or more dollars after a three-month period. The most popular price interval, however, was selected by 17% of the voters, namely the 1.24-1.26, while the second most popular choice implies that the Sterling is to cost between 1.28 and 1.30 dollars in three months, chosen by 15% of the surveyed. At the same time, the mean forecast for Nov 10 is 1.3156.