FX.co ★ GBP/USD Forecast for December 10, 2012

U.K. data published on Friday turned to be weak. Manufacturing output fell 1.3% month-on-month on October while expectations were for a 0.2% fall. Industrial production declined 0.8% against expectations for a 0.9% rise. Meanwhile, survey showed the public expects prices to rise by 3.5% over the coming year in November, up from 3.2% in the previous survey in October. After the data was released the pound dropped 60 basis points. Later that day U.S. Non-farm Payrolls grew 146K against 90K and the Unemployment rate fell from 7.9% to 7.7%. As a result, technically the outlook was different to one we had suggested. First, it was drop, then rise.
At 21:15 GMT+4 Sir Mervyn King, the governor of the Bank of England, is to speak. Probably due to the recent events he will speak about inflation risk, which is considered to be a hint that BOE will keep the current rate.
From the technical point of view, the growth is possible when the price breaks the Friday’s high 1.6041, the target is 1.6060, the high of December 7; the second target is 1.6074, resistance of the trendline on the H4. The downward move is hindered by a great number of local levels. Nevertheless, the fall is possible towards 1.5997 and further to 1.5975.