GBP/USD upside capped near 1.2440 post-data

The Sterling has faded the earlier spike to the 1.2440 area vs. the greenback, with GBP/USD now returning to the 1.2425/20 band.

GBP/USD off highs after data

The pair has trimmed earlier gains after mixed results from the UK docket showed Industrial Production contracting at a monthly 0.4% during September and Manufacturing Production expanding above estimates 0.6% inter-month during the same period.

Spot manages well to keep the trade above the 1.2400 handle for the time being, as markets get ready for the upcoming US presidential elections.

It is worth recalling that the sentiment around GBP was boosted recently following the shift in the stance from the BoE at the last meeting and the decision of the High Court on Article 50, all accompanied by an increasing selling mood around the buck seen in the past couple of weeks.

Looking ahead, USD will take centre stage in light of the crucial events in the US economy, where the latest election polls suggest the Democratic candidate H.Clinton is leading the vote intention by 2-4 points.

GBP/USD levels to consider

As of writing the pair is up 0.25% at 1.2426 facing the next resistance at 1.2559 (high Nov.4) followed by 1.2742 (55-day sma) and then 1.2945 (100-day sma). On the other hand, a break below 1.2290 (20-day sma) would open the door to 1.2086 (low Oct.11) and finally 1.1450 (low post-‘flash crash’ Oct.7).

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