Global macro overview for 10/07/2018
July 10, 2018 12:22 pmVideo
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Global macro overview for 10/07/2018:
The UK industrial data disappoints
The data set from Great Britain is slightly unsatisfactory. In May, industrial output unexpectedly fell 0.4% m/m against an expected increase of 0.5%. Production output also fell less, growing by 0.4% (exp. 0.7%). The statistical office also started monthly publications on GDP dynamics – in the three months to May, GDP increased by 0.2%, in line with expectations.
Industrial output is a measure of the manufacturing output of the energy sector, factories, and mines. Industrial production is significant as a short-term indicator of the strength of UK industrial activity. Industry accounts for about a quarter of the overall GDP. Because industrial production accounts for most of the volatility in the GDP, foreknowledge of trends in manufacturing goes a long way in forecasting UK output. High or rising Industrial Production figures suggest increased production and economic expansion, healthy for the Pound. However, uncontrolled levels of production and consumption can spark inflation. In times of inflation, the Bank of England may raise interest rates to control growth.
Let’s now take a look at the GBP/JPY technical picture at the H4 time frame. After the data were released the market slid from the level of 147.80 to 147.20, but the price is still trading inside of the rising channel. The next technical support is seen at the level of 146.62 and then at 146.02. The momentum remains strong, but there is a visible bearish divergence between the price and the momentum indicator, which suggest the short-term pullback is still on the table. Please keep an eye on the technical resistance zone between the levels of 148.11 – 147.79 as any breakout higher is bullish.
The material has been provided by InstaForex Company – www.instaforex.com
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