Global macro overview for 08/09/2017:
The UK Industrial Production data did not surprise the market participants. On monthly basis, the Industrial Production declined from 0.5% to 0.2%, in line with expectations. On a yearly basis, however, the Industrial Production increased from 0.3% to 0.4%. The Manufacturing Production data were even better, as they number revealed a 0.5% increase in manufacturing output on a monthly basis.
Behind the increase was mainly a sharp increase in car production (13.7%), which was the fastest rise recorded in official data on the car industry since March 2009. According to the Office for National Statistics (ONS): "Manufacturing remains relatively subdued since the start of the year, though July showed the first significant monthly growth of 2017, with car production increasing partly thanks to new models rolling off the production lines."The other sectors responsible for the rise was mining and quarrying, while the whole manufacturing sector is benefiting from weaker British Pound rates ( especially exporters). Overall the data provided some kind of relief over the manufacturing and industrial production sectors performance as the official data were recently showing the sector facing another downturn despite the weakened Pound.
Let's now take a look at the GBP/USD technical picture at the H4 time frame. The bulls have managed to retrace almost 78% of the previous swing down and currently, the price is trading at the level of 1.3162. If this level is clearly violated, then the next technical resistance is at the level of 1.3190 and then only swing high at the level of 1.3267 remains. Please notice the growing bearish divergence between the price and momentum indicator.
