FX.co ★ GBPUSD: The UK economy has slowed sharply compared with the previous month after a good first quarter

The pound has collapsed because it became known that in April of this year, compared with March, UK GDP dropped significantly. The economic slowdown is returning after a good first quarter since the UK exit from the EU was postponed again until this fall, which is why the uncertainty in this direction began to put pressure again on companies and the financial sector.

Let me remind you that Britain's withdrawal from the EU has already been postponed twice due to internal confrontations and political struggle around the conditions of the divorce. Now, the release date is scheduled for October 31.

According to the National Bureau of Statistics, in April this year, the UK economy declined by 0.4% compared with March. As expected, the main problem was in the manufacturing sector. Even despite Brexit, production activity is also slowing down amid concerns about trade conflicts.

According to the data, the industrial production of Great Britain in April of this year fell sharply by 2.7% compared with March and by 1.0% compared with the same period of 2018. It was expected that industrial production in the UK in April will decrease by 1.0% compared with March and grow by 0.7% compared to the same period last year.

Manufacturing production in the UK fell immediately in April by 3.9% and 0.8%, while a decrease of only 1.5% was expected and an increase of 1.7% compared with the same period of 2018. Production of cars compared with March fell by 24%.

The negative contribution was also made by a sharp reduction in stocks compared to March when growth was still observed due to the probability of the UK leaving the EU.

The deficit of foreign trade in goods of Great Britain in April decreased slightly and amounted to 12.1 billion pounds against 15.4 billion pounds in March (revised value). Economists had expected the UK foreign trade deficit to be at 13.1 billion pounds.

As for the technical picture of the GBPUSD pair, the upward trend has broken, and now, with any growth from large resistance levels around 1.2690 and 1.2730, new players will return to the market, putting on a decrease in the pound. The first targets of the sellers will be the support levels at 1.2620 and 1.2560.