GBP/USD advances above 1.32 on robust UK data and weak greenback

After closing the previous day 60 pips higher, the GBP/USD pair sustained its bullish momentum on Tuesday and recently rose above the 1.32 handle. As of writing, the pair was trading at 1.3223, gaining 0.62% on the day.

Earlier in the day, the data from the UK revealed that the industrial production expanded by 1.6% on a yearly basis in August, beating the market expectation of 0.8% while the manufacturing production grew by 2.8%. Furthermore, the GDP estimate released by the National Institute of Economic and Social Research came in unchanged at 0.4%. However, further details of the report showed that the NIESR was expecting the BoE to do a rate hike as early as November.

• UK: GDP growth of 0.4% in third quarter of 2017 - NIESR

On the other hand, the greenback continues to weaken against its peers for the second day in a row, pushing the US Dollar Index to a fresh weekly low below the 93 mark. At the moment, the index was at 92.98, losing 0.61% on the day. According to the data released by the IBD/TIPP, the Economic Optimism Index in the U.S. plummeted to its lowest level in a year at 50.3 in October, highlighting an increasing discomfort with the direction of the country and its leadership.

• US: Economic Optimism Index falls in every category in October - IBD/TIPP Poll

With no more data left in the remainder of the day, the DXY fluctuations could continue to drive the pair's price action.

Technical outlook

The RSI indicator on the daily graph for the pair recovered to the 50 handle, suggesting that the bearish momentum has completely faded away. The initial hurdle for the pair aligns at 1.3300 (psychological level) ahead of 1.3350 (20-DMA) and 1.3430 (Sep. 29 high). On the downside, supports could be seen at 1.3200 (psychological level), 1.3150 (50-DMA) and 1.3055 (100-DMA).