FxWirePro: UK manufacturing activity, trade balance missed forecasts but Japan’s consumer confidence to boost Yen against Pounds

U.K. has released its manufacturing production data which is quite disappointing at -0.8% while forecasts were at positive 0.2% dampening optimism over the country's economic outlook.

In addition to that U.K's trade deficit widened to -11.1 billion from previous -8.5 billion, the U.K.'s goods trade deficit expanded more than forecasts in July.

Imports of goods were increased by £0.3 billion to £33.9 billion over the same period. While exports of goods were reduced by £2.3 billion to £22.8 billion, the most contracted numbers of exports since September 2010. This is attributed to decreases in semi-manufactures, specifically finished manufactures of £0.8 billion and chemicals of £1.0 billion.

Technical Glance:

On monthly chart, the formation of hanging man pattern candle on peaks of uptrend at around 193.456 levels. This hanging man followed by two long real body red candles would reveal a medium term downtrend direction. Overall pattern on the pair fixes it bearish view for a target of 177.125 to 175 levels. In addition to that huge volumes are popping up to show bearish sentiments, while leading oscillators (RSI & slow stochastic) show convergence with dipping prices at current levels. RSI is currently trending at 59.5911 levels, while %D crossover above 80 levels signifies the selling momentum is intensifying.