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Talking Point:
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BOE UK Mortgage Approvals (Jun): 67.2K Actual Vs 63.0K Estimated; 62.0K Prior (Revised Higher).
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UK Lending to Individuals Net Lending Secured on Dwellings (Jun): 2.1B Actual Vs 1.9B Estimated; 2.3B Prior.
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GBP/USD Recoups All Its Losses Earlier in the Session, However, Stays Firmly Below 1.7000 Level.
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UK Mortgage Approval figure came in at 67.2K for the month of June versus 62.0K in the prior month. The data which shows the number of new mortgages approved for home purchases exceeded market expectations of 63.0K. Moreover, June’s UK Net Lending of Individuals reported a print of 2.1B versus 2.3B reading in May. It slowed compared to the prior month, however, the print outpaced market’s forecast of 1.9B. This data is considered to provide a gauge for consumer spending and confidence as rising debt levels are a sign that consumers are comfortable in their financial position and, therefore, increases consumption. Thus, potentially stimulating economic growth for the UK economy.
Ahead of the data, GBP/USD grinded lower to trade at 1.6979 and stayed securely below the critical 1.7000 level. After the release, the British Pound gained all its earlier losses against the US Dollar to trade as high as 1.6992.
Whilst another quiet day on the European economic data front, it remains busy for the US Dollar as July’s US Consumer Confidence is due at 14:00 GMT and is expected to increase to a six-year high of 85.4. This is followed by the high-profile FOMC Meeting, 2Q US GDP print, and July’s Non-Farm Payrolls number. Thus, “an upbeat US economic outcomes are likely to support the view that tightening will materialize relatively sooner versus later, pushing the US Dollar higher” says DailyFX Currency Strategist Ilya Spivak point out
From a technical panorama, Ilya Spivak has designated near-term support to rest at 1.6969 (23.6% Fib Ret.) and resistance at 1.7053 (14.6% Fib Ret). He remains on the sidelines as entering short with prices trading in close proximity to support level is not enticing from a risk/reward perspective. Also, the absence of a defined bullish reversal signal argues against going long. Meanwhile according to DailyFX Speculative Sentiment Index, 40 percent of retail Forex traders are long the GBP/USD.
GBP/USD 5 Minute Chart
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Edward Hyon, DailyFX Research Team
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