GBP/USD catches a bid ahead of European markets, UK data

• Sterling pushing up ahead of London market open.
• UK Manufacturing, Industrial Production in the spotlight at 09:30 GMT.

GBP/USD has broken out of the tight range it was trading within during Asia, and is testing into the 1.3965 region ahead of European markets.

The UK has Manufacturing and Industrial Production figures coming at 09:30 GMT; market forecasts are calling for a 0.3% increase in month-over-month data for Manufacturing in December, but analysts at ANZ are anticipating a decline of 0.2%.

Even if production figures come in at a near miss, the Sterling may find solace in statements made today by the Bank of England's Deputy Governor of Monetary Policy Ben Broadbent, who spoke briefly on BBC Radio 5's Wake Up Money program; Broadbent gave markets a heads up that as economic activity improves, we can expect to see rate increases from the BoE sooner rather than later, although those increases may come smaller and over a longer time period than many might expect. Broadbent highlighted the possibility of the BoE doubling rates from 0.5 with a series of 0.25 basis point increases, and that these rate increases would be unlikely to shock the current economic balance within the UK.

GBP/USD Technicals

The pair is straddled by swing support/resistance at 1.3855 and 1.4040 respectively, while long-term charts show a currency pair that is still well within a dedicated uptrend, with price still trading above the 34 EMA and the 200-day SMA below that at 1.3212. The Sterling has been gaining against the Greenback steadily since January of 2017, and a correction from here could still see the GBP accelerate into a fresh bullish trend, assuming markets don't balk at interest rate increases in the face of growing inflation that seems to have caught markets off-guard recently.

Today's pivot points:  
R2: 1.4162
R1: 1.4037
PP: 1.3941
S1: 1.3816
S2: 1.3721