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British Pound Pulls Ahead

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British Pound Pulls Ahead

The British pound was higher Tuesday, as stronger than forecast mortgage approvals outweighed concern the UK housing market may be overheating.

The British Bankers’ Association said banks approved 50,000 mortgages last month, the highest level since September 2007. The data suggest first-time buyers benefited from government lending schemes, which passed on cheap finance to banks in an effort to stimulate the housing market. The relentless pace of growth in mortgage approvals and home sales has raised concern the UK real estate market may be overheating.

The GBPUSD pair rose to a daily high of 1.6727, before consolidating at 1.6706 in North America’s mid-day session. This represented a gain of 50 pips. The pair lost considerable momentum last week after the Office for National Statistics said UK unemployment rose from 7.1 percent to 7.2 percent in the three months through December. The technical indicators show initial support at 1.6619, followed by 1.6578 and 1.6536. On the upside, technical resistance is ascending at 1.6716, 1.6758 and 1.6800.

The EURGBP currency pair traded within a narrow range before succumbing to bearish pressures. The pair lost 14 pips and was trading at 0.8231 as of 16:30 GMT. Initial support is located at 0.8217. On the upside, initial resistance is found at 0.8267.
In euro news, German national gross domestic product rose 0.4 percent in the fourth quarter, matching initial estimates from the Federal Statistics Department. Annually, Europe’s largest economy expanded at a non-seasonally adjusted pace of 1.3 percent.

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