UK industries improved, domestic demand remains weak

UK's manufacturing and industrial production surprised on the upside in March as today's data showed.

• Manufacturing rose 1.1% in March on yearly basis and rose 0.4% m/m and industrial production rose 0.5% m/m and 0.7% on yearly basis.

Pound has taken positive cues and steered to the upside. Pound is currently trading at 1.566 against dollar heading next set of interim resistance around 1.575.

Today's data is definitely a positive welcome to UK's ailing industry, however it remains too early to say that manufacturing has rebounded.

On another hand retail sector and prevalent domestic discounts by retailers point that domestic demand still remains weak.

• BRC retail sales dropped by -2.4% on yearly basis in April, whereas rebound in March was much stronger at 3.2%.

Since Industrial production is lagging BRC retail sales by a month, it poses doubts over the sustenance of Industrial rebound.

Pound is however taking no note of such as of now, buoyed by back to back positive news since last week when conservatives returned to power with outright majority. Pound is very much likely to test resistance around 1.595-1.60 as bulls remain in charge.