British Pound Rockets Higher as Trade Balance Exceeded Forecast

British Pound finally showed signs of a bullish sentiment, as the GBPUSD pair surged higher during the London session today.

UK trade balance released by the National Statistics posted a trade deficit of £-8.000B in May 2015, whereas the market was expecting £-9.700B.

UK Trade Balance non-EU was also on the better side with a deficit of £-1.570B.

UK Trade Balance

Earlier today in the UK, the Trade Balance report, which is a balance between exports and imports of total goods and service was released by National Statistics. The market was expecting a trade deficit of £-2.550B in May 2015. However, the outcome was on the higher side, as the UK Trade Balance came in at £-1.570B. The report highlighted that the extent of import and export activity is a main contributor to the overall economic growth of the UK.

When we look as the imports figure, then it decreased by £1.4 billion in May 2015 to £32.6 billion, and exports were also affected. The report suggested that the imports level is the lowest level since April 2011. However, the market cheered the fact that the outcome was not that bad, and was better compared with the forecast.

German WPI
In the Euro Zone, the German wholesale price Index, which shows value of sales made by wholesalers in German was released by the Statistisches Bundesamt Deutschland. The outcome was disappointing, as there was a decline of 0.2% in June 2015, compared with the last increase of 0.5%.

GBPUSD Technical Analysis
The British pound enjoyed a decent run towards the upside after the trade balance report. The GBPUSD pair spiked more than 50 pips to trade above 1.5450. There was a solid buying interest developed, which has the potential to take the pair towards 1.5500 in the near term.
On the downside, the 1.5420-00 area might act as a support moving ahead.

Yours,
Vladimir

Advertisement

Click To Join Our Community Telegram Group