US industrial production was unchanged last month, while market analysts anticipated an increase, official figures revealed on Friday. The Federal Reserve reported factory production came in at 0.0% in February, falling behind analysts' expectations for a gain of 0.3%. Meanwhile, January's initially reported drop of 0.3% was revised to a 0.1% fall. However, manufacturing production, which accounts for 75% of overall industrial output, posted a 0.5% increase in February that matched the preceding month's rise. A global economic recovery, stronger business investment in equipment and appropriate inventory levels allowed manufacturers to gain momentum over the last several months. The advance in manufacturing output was in line with analysts' forecasts.
Data also showed utility output decreased 5.7%, following a 5.8% decline in January. The fall was mainly driven by unusually warm temperatures. Mining production rose 2.7% last month, boosted by oil and gas drilling. Business equipment output advanced 0.7% in February, compared to a 0.1% decline registered in the prior month, whereas production of construction supplies increased 1.3% after climbing 1.4% in January. Other data released on Friday showed mood of American shoppers jumped to 97.6 in March, according to the preliminary reading released by the University of Michigan.
Uneventful Monday
GBP/USD in limbo between 55 and 100-day SMAs
The Cable managed to unexpectedly recover from its intraday low on Friday, ultimately ending trade in the green zone. Moreover, the British Pound was able to breach the immediate resistance, but with gains unable to climb over the 1.24 major level, where psychological resistance was strong. Friday's rally only confirmed the overall outlook, with the GBP/USD pair now being one step closer to reaching its main goal, namely the nine-month down-trend. The final obstacle ahead of this target is the 100-day SMA, which provides resistance circa 1.2415, but technical studies are unable to confirm the possibility of another positive outcome.
Daily chart
Hourly chart
Traders mostly bullish
There are still 68% of traders being long the Sterling today, while all pending orders are now equally divided between buy and sell ones.
A slightly less optimistic situation is observed elsewhere. For example, 59% of positions open at OANDA are currently long. This is more than the share of shorts (41%), barely sufficient for the sentiment to be called bullish. Meanwhile, sentiment at Saxo Bank is also bullish, with 60% of traders now being long and the other 40% being short the Sterling against the US Dollar.
Spreads (avg, pip) / Trading volume / Volatility
Traders still indecisive
By the end of the next three months traders expect the Cable to fall under the 1.22 major level, as 55% of survey participants believe so. While the current price is around 1.23, the average forecast for June 20 is 1.2282. The 1.20-1.22 ranges is now the most popular price interval, having 15% of the votes, while on the second place are the 1.14-1.16, 1.28-1.30 and 1.30-1.32 price ranges, all three with 13% of poll participants choosing them. Furthermore, the 1.16-1.18 and the 1.18-1.20 intervals were each chosen by 11% of the voters.