The GBPUSD spot price has moved sideways in the past few days ahead of the upcoming UK mortgage data and US consumer confidence data. It is hovering near the highest level since August as the US dollar retreat continues.
The GBP to USD exchange rate has been in an upward trend recently as the US dollar has pulled back. The closely watched US dollar index (DXY) has dropped from the year-to-date high of $115 to about $105. Similarly, the volatility index, commonly known as VIX plunged by over 40% from its highest level in October.
The GBPUSD price will next react to the upcoming mortgage data from the UK. With interest rates at an elevated level, analysts expect the data to show that mortgage lending to individuals continued dropping in October. Precisely, they expect the volume of lending dropped from 6.8 billion pounds to 6.7 billion. Mortgage approvals are expected to have dropped to 60.20k.
The GBP/USD spot price will also react to the latest US consumer confidence and house price index (HPI) data. Economists polled by Reuters expect the data to show that consumer confidence dropped from 102.5 in October to 100 in November. The house price index (HPI) is expected to have dropped from -0.7% to -1.2%.
The most important catalyst for the GBPUSD price this week will be the latest American nonfarm payrolls (NFP) data scheduled for Friday. Economists expect that the country’s economy added over 200k jobs in November while the unemployment rate improved from 3.7% to 3.6%.
The Federal Reserve and Bank of England (BoE) have embraced a more hawkish tone although they are expected to start raising rates at a smaller pace.
The daily chart shows that the GBP/USD pair has been in a strong bullish trend in the past few days. It managed to move above the key resistance level at 1.1745, which was the lowest point on July 14. The pair has also risen above all moving averages. It has also moved to the second resistance of the standard pivot point.
Therefore, the GBPUSD spot price will likely continue rising as buyers target the third resistance at 1.2490. A drop below the key support at 1.1745 will invalidate the bullish view.
This post was last modified on %s = human-readable time difference 04:48