GBP/USD retreats from highs on UK data, near 1.3950

• Cable trims gains to 1.3950.
• UK’s industrial production dropped 1.3% MoM.
• UK’s trade deficit widened in December.

The Sterling keeps the bid tone during the second half of the week, with GBP/USD now navigating the mid-1.3900s in the wake of UK data releases.

GBP/USD gives away gains post-data

Cable stays bid on Friday despite UK’s industrial production contracted 1.3% MoM in December, more than initially expected. In addition, manufacturing production expanded at a monthly 0.3%, matching prior surveys.

Further data also saw the trade deficit widening to £13.58 billion during the last month of 2017.

In the meantime, the pair reverted the negative performance seen in the first half of the week in response to the hawkish tone from the Bank of England on Thursday, which hinted at the likeliness of further tightening in the next months. That said, consensus among traders now expects the ‘Old Lady’ to hike rates at the May and December meetings.

Next on tap in the UK calendar will be the NIESR GDP Estimate (0.6% prev.).

GBP/USD levels to consider

As of writing, the pair is gaining 0.27% at 1.3050 facing the next hurdle at 1.4048 (10-day sma) followed by 1.4065 (high Feb.8) and finally 1.4280 (high Feb.2). On the downside, a breach of 1.3836 (low Feb.6) would aim for 1.3652 (55-day sma) and then 1.3457 (2018 low Jan.11).