The Great Britain Pound weakened across the board and fell to fresh five-year lows against the dollar on Tuesday after data showing that U.K. industrial and manufacturing production dropped sharply in November, adding to concerns over the uneven economic recovery.
The Office for National Statistics said industrial production fell 0.7% in November from the previous month, compared with forecasts for a flat reading. It was the biggest drop since January 2013.
Manufacturing production fell 0.4% compared with October, well below forecasts for a 0.1% increase.
On a year-over-year basis, manufacturing production contracted by 1.2%, its fourth consecutive month of contraction. Economists had forecast a more modest decline of 0.8%.
The weak data indicates that businesses in the U.K. are suffering from weaker overseas demand, partly due to a slowdown in China and the impact of the stronger pound.
Sterling remained under heavy selling pressure amid concerns that the Bank of England will signal that rates are likely to remain on hold for longer after its policy meeting on Thursday.
Intra-day bias stays on the downside with 21 and 55 EMA divergence to the south seen on the 1 hour, 4 hours, Daily, Weekly and Monthly time-frame, more sell off could be seen in the pair. Also SSRC oscillator shows more selling momentum is still in progress and am expecting further decline to 1.4300 support in the medium term picture if we get a break of 1.4350 low.
However in the short term picture, engulf price action formed around weekly support suggests that we might get a buy retracement of the current bearish trend in the pair and if the buy pull back is sustained enough, it might signal a reversal in play.