UK Industrial production preview: What to expect of GBP/USD?

The GBP/USD pair bulls maintained the bid tone from the previous trading session as the pair builds on to its gains above 1.4400 handle to trade near 1.4460 level, inching towards 1.4480 weekly high level.

Beyond the looming UK referendum on June 23, investors on Wednesday would focus on the UK industrial and manufacturing output figure for the month of March, due for release at 08.30 GMT.

Industrial & Manufacturing Production expected to rise

The manufacturing production, which makes up around 80% of total industrial production, is expected to rebound from a contraction of 1.1% in February to show expansion o 0.4% in March. Meanwhile, the total industrial production is expected to register a rise of 0.7% as compared to -0.3% recorded in the previous month.

Today's release will provide investors with an insight on the outlook of the UK economy. A sharp rebound may boot outlook for growth and inflation, thus sparking a bullish reaction in the GBP/USD pair. However, an unexpected contraction coupled with the 'Brexit' fears and the recent disappointment from PMI readings, would provide headroom to the BoE to adopt a wait and watch approach and continue with its accommodative monetary policy stance for an extended period of time.


GBP/USD technical levels to watch

From technical perspective, the GBP/USD pair is trading near a short-term descending trend-channel resistance near 1.4460 level, which is closely followed by weekly high resistance near 1.4480 level (also coinciding with 38% Fibonacci retracement level of 1.4009-1.4770 up-move).

A convincing break-through the 1.4460-80 resistance should assist the pair to surpass 1.4500 handle resistance and head towards its next major resistance near 1.4540-45 zone. Alternatively, reversal from current resistance zone and a subsequent break below 1.4400-1.4380 handle support would open room for a break below 50% Fibonacci retracement level and 100-day SMA confluence support (near 1.4365 level) towards testing another confluence support near 1.4325, comprising of 50-day SMA and the descending trend-channel support.