UK BBA Mortgage Approvals
Earlier today, at 8:30 a.m., the British Bankers’ Association (BBA) released its Mortgage Approvals figure that measures the number of new mortgages approved by BBA represented banks for home purchase in the United Kingdom during the last month.
Since new mortgage approvals indicates the number of qualified home buyers and BBA presented banks has a 65% market share in the UK mortgage lending market, this figure is considered by analysts to be a leading indicator of overall economic health in the country.
Last month, the BBA Mortgage Approvals figure came out at 43,200, and the forecast for this month was set at slightly higher, at 44,200. However, the actual figure came marginally short at 42,800, which appeared to have a negative impact on the British Pound (GBP).
US CB Consumer Confidence
During the afternoon, at 2:00 p.m., the Conference Board Inc. published its Consumer Confidence index that measures the level of a composite index created from data based on a regular monthly household survey.
A higher consumer confidence usually indicates future consumer spending, which can significantly affect the overall economic conditions. Hence, economists consider this kind of survey based index to be a leading indicator.
Last month, the CB Consumer Confidence index was at 90.3. This month, it was forecasted to come out at 89.1, but the actual figure came out way better than expected, at 92.4. An increasing consumer confidence suggested that the US consumers are optimistic about their financial situation, which may lead to further consumer spending in the coming days.
Trade Recommendation for the GBP/USD
The GBP/USD has been trending downwards since July 15, 2014 and formed a sharp down trend line. On August 13, the pair further declined and closed below the psychological support level, 1.6700. Furthermore, the GBP/USD managed to close below the next support area, 1.6580, on August 22.
Worse than expected British Bankers’ Association (BBA) Mortgage Approvals and better than expected US CB Consumer Confidence data have further solidified the bearish market sentiment. If the pair can close below the immediate support area around the 1.6535 level this week, it would suggest a PUT in the GBP/USD.
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About our Forex Analyst: Asif Imtiaz
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