GBP/USD FALLING AFTER UK DATA

While the British Minister of Health announced that they are turning the corner in the Covid-19 outbreak, he announced that the quarantine rules to be applied at home and hotels will come into effect on Monday. However, after the announcement that there was a new virus mutation in England, the tension increased a little on the Sterling side. On the last trading day of the week, industrial production in the UK rose by 0.2 percent on a monthly basis, slightly above expectations. In manufacturing production, it is seen that there was a loss of momentum with a monthly rate of 0.3 percent compared to the previous month. After the British economy contracted by 7.8 percent in the fourth quarter, it triggered the retreat in the parity. In the UK, it is seen that the service sector production due to the Covid-19 outbreak is experiencing a slight recovery with an increase of 1.7 percent on a monthly basis.

On the US side, while the weakness in inflation and the lack of concrete results regarding the support package pressured the dollar side, a partial upward momentum was experienced in the dollar on the last trading day of the week. This general acceleration increased the tension of Sterling within G10 currencies. US House of Representatives President Nancy Pelosi's announcement that she expects the aid bill to be completed by the end of February, while unemployment pension applications and below the 800,000 level were maintained, the dollar's declines were limited. However, with the acceleration of vaccination efforts after Brexit, there is an ongoing upward momentum in the parity in general terms.

In the technical picture of GBPUSD, while the week has passed with a very upward trend, the return movement from 1.3855 on the last trading day of the week came to the agenda. Nevertheless, with the weak dollar effect preserved in the general scenario, maintaining the outlook above 1.37 level in the parity may cause the rises to move over 1.3830 level again. Our critical resistance point in this above level view is kept up to date as 1.40. However, with a possible close below 1.3780, dips can be expected to gradually gain momentum behind 1.37 and 1.3630 support levels.