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Forex: GBP/USD around 1.4860/70 ahead of UK NIESR

The London morning tumble to 1.4832 low was almost retraced after the bounce to 1.4909, but the pair didn't hold there and allowed a move lower to 1.4860/70, where it is wandering around ahead of UK NIESR GDP Estimate data. The GBP/USD trades at 1.4868, -0.32% on the day.

UK Goods Trade deficit narrowed from £-8.738B in January (revised from £-8.897B) to £-8.195B, beating consensus of £-9.000B. Non EU-trade data was also well received, at £-3.28B, from £-4.169B (consensus of £-4.50B). "Today’s visible trade deficit unexpectedly improved from £8.7bn to £8.2, but this was driven by an inventory correction in oil imports, and excluding oil and erratics from the data, exports and imports fell and the deficit worsened", wrote TD Securities analyst Tim Davis.

The main reason for today's downside pressures comes from industrial and manufacturing data. UK industrial production fell -1.2% (consensus of +0.1%) and manufacturing production dropped -1.5% (consensus of 0.0%) in January. Annualized data contracted further from -2.1% to -2.9% (consensus of -1.1%) and from -1.6% to -3.0% (consensus of -1.1%), respectively.

In the week ending at March 3, the yearly rise of the Redbook index was from 2.2% to 2.7% after a weekly change of +0.6%.

UBS analysts are bearish: “The pair extends weakness posting a new corrective low”, wrote analyst Gareth Berry, pointing to support at 1.4687 ahead of 1.4347, while resistance is at 1.4993 ahead of 1.5083.

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