Key Points
- The British Pound after testing 1.3280 versus the US dollar failed and collapsed.
- There is a minor bearish trend line on the hourly chart of the GBPUSD pair, which is currently acting as a resistance.
- In the UK, the Consumer Credit released by the Bank of England posted a reading of £1.181B, less than the forecast for July 2016.
- The UK Mortgage Approvals were also on the lower side with a reading of 60.912K.
GBPUSD Technical Analysis
The British Pound recently after climbing towards the 1.3280 level versus the US dollar found sellers and moved down. The GBPUSD pair traded as low as 1.3065 where it found buyers and currently attempting to correct higher.
However, the upside may be limited, as there is a bearish trend line on the hourly chart, which may act as a resistance.
The pair is also below the 21 hourly simple moving average, which means we may consider selling rallies.
UK Consumer Credit and Mortgage Approvals
Today during the London session, there were a couple of economic releases in the UK. The Consumer Credit, which is an amount of money that individuals borrowed in the previous month was released by the Bank of England.
The forecast was lined up for a reading of £1.700B in July 2016. However, the outcome was disappointing with a reading of £1.181B. Moreover, the UK Mortgage Approvals were also on the lower side with a reading of 60.912K. The report for credit stated that “Households’ holdings of M4 increased by £8.9 billion in July, compared to the average monthly increase of £7.5 billion over the previous six months. The three-month annualized and twelve-month growth rates were 7.4% and 6.7% respectively”.
Overall, it looks like as long as the GBPUSD pair is below the trend line resistance, it remains at a risk of more losses.
