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GBP/USD holds steady, as markets await US data, UK mortgage approval

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GBP/USD holds steady, as markets await US data, UK mortgage approval

The British pound was trading steady against its US counterpart amid a dearth of economic data from both sides of the Atlantic. The GBPUSD pair, which failed to re-test 1.70 last week, awaits more compelling evidence on Tuesday.

The GBPUSD was trading at 1.6847, advancing 0.07 percent. The daily chart shows initial support is likely found at 1.6790 and resistance at 1.6855.

The pair is looking to recover from two consecutive losing sessions at the end of last week. The US dollar advanced broadly amid signs the housing sector was regaining momentum in April. US existing home sales increased 1.3 percent to 4.65 million, and new home sales surged 6.4 percent to 433,000.

The US had no data to report Monday, as the markets paused to observe Memorial Day.

The US data wire heats up again Tuesday with several market-moving reports. The Commerce Department will report on durable goods orders for April. A broad consensus of market analysts polled by Bloomberg says orders for durable goods declined sharply April, driven down by the transportation orders.

Markit Group will report on the US service economy. The monthly PMI reading is expected to show a strong uptick in services activity in May.

The Conference Board will also release its monthly consumer confidence indicator. Economists expect a slight increase over the April reading of 82.3. A separate consumer confidence gauge released by the University of Michigan earlier this month suggested consumer sentiment declined in May, as concerns about wage growth undermined an otherwise positive outlook.

In the UK, the British Bankers’ Association will report on April mortgage approvals Tuesday. The figure is expected to show a slight drop in mortgage approvals, supporting the view the UK housing sector was showing signs of moderation after a worrisome boom period prompted speculation of a housing bubble. April would mark the third consecutive month mortgage approvals declined.

UK mortgage approvals declined to a four-month low in March, the BBA reported last month. The BBA said members approved 45,933 mortgages that month, down from 47,196 in February.

Nationwide will report on UK house prices Wednesday. UK house prices in May are forecast to have risen more than 10 percent year-on-year.

Pound bulls are still eying the 1.70 US level. The speed at which sterling tops that critical level will depend on the perceived weakness of the US dollar. Tuesday’s data will be used by investors to determine whether the US economy has regained its footing after a volatile first quarter. The US economy is believed to have contracted in the first quarter, weighed down by severe weather. The Commerce Department will post revised GDP figures on Thursday.

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