UK pound
Pound off lows on trade data but remains weak ahead of inflation report hearings iStock

The pound moved off the day's lows after April trade data came in better than expected but the currency remained weak amid ongoing deliberations on the EU referendum and inflation report hearings later in the day.

The UK parliament will be debating the proposed referendum on continuing in the European Union today, 9 June, making it a crucial day for the sterling as well as the euro.

The GBP/USD traded at 1.5298 immediately after the data, moving off the day's low of 1.5272, but still below the previous close of 1.5348.

The correction in the sterling from the six-month high of 1.5815 hit mid-May seems to have ended at 1.5230, a support endorsed by the 50-day moving average.

As long as that support holds, the pair could bounce back to new multi-month highs but resistance at 1.5550 may be a bit to break.

On the downside, 1.5200 and 1.5095 are the two immediate levels to watch out for. The most important level to consider on the downside is 1.5000 a break of which opens the doors back to new multi-year lows below the April lows of 1.4587.

The UK's goods trade deficit narrowed to £8.561bn from the March gap of £10.705bn while the market was expecting a wider deficit of £9.900bn.

The non-EU balance came in as a deficit of £2.094bn down from £3.429bn in March compared to a market forecast of £3.000bn.

After the UK inflation hearings, the pointer to look out for is the industrial output data for April, due on Wednesday.

The market consensus for manufacturing output is a rise of 0.4% year on year much slower than the March reading of 1.1%.

In the UK, disinflationary pressures seem to have decreased as per poll forecasts for the May inflation data scheduled for 16 June. The parliamentary debate on inflation will be crucial in the near term.