With all the hubbub surrounding the UK economy and potential for more asset purchases by the Bank of England, bullish GBPUSD traders profited on the day following a key release that showed growing credit levels. The survey lends some optimism to the near term economic outlook for the British economy, especially when taken into consideration along with mortgage approval prints.
Banks Thawing
According to Bank of England data, consumer lending rose in the month of December – hitting the highest level since April of 2012. Official data showed that individual bank lending grew by 1.7 billion pounds in the last month of the year, above the 900 million pound estimate by market analysts. The second increase in the last four months, the data reflected a likelihood that the central bank’s Funding for Lending program may actually be working.
The measure, which was implemented in July of 2012 and gave banks access to approximately $123 billion in cheap funds, was passed on the premise that it would help to thaw credit markets and allow for more consumer credit growth.
As a result, the positive figure is helping to bolster the notion that policymakers won’t have to resort to another round of asset purchases. Markets had already been pricing in a likely increase of 25-50 billion pounds more in monetary stimulus.
Subsequently, the survey showed an uptick in the number of mortgage approvals in the same month. For December, approvals rose to 56,000, up from November’s 54,000. The actual release rose above expectations of a 55,000 print.
What’s Next In GBPUSD?
Extending through on the bounce off of the 4-year ascending trendline support at 1.5700, the GBPUSD looks set for a test of 1.5825. A break above the figure would activate resistance at 1.5900, with medium term targets likely set at the 1.5941 38.2% resistance barrier.
Any downside correction should be held at bay by the aforementioned round figure support.
Banks Thawing
According to Bank of England data, consumer lending rose in the month of December – hitting the highest level since April of 2012. Official data showed that individual bank lending grew by 1.7 billion pounds in the last month of the year, above the 900 million pound estimate by market analysts. The second increase in the last four months, the data reflected a likelihood that the central bank’s Funding for Lending program may actually be working.
The measure, which was implemented in July of 2012 and gave banks access to approximately $123 billion in cheap funds, was passed on the premise that it would help to thaw credit markets and allow for more consumer credit growth.
As a result, the positive figure is helping to bolster the notion that policymakers won’t have to resort to another round of asset purchases. Markets had already been pricing in a likely increase of 25-50 billion pounds more in monetary stimulus.
Subsequently, the survey showed an uptick in the number of mortgage approvals in the same month. For December, approvals rose to 56,000, up from November’s 54,000. The actual release rose above expectations of a 55,000 print.
What’s Next In GBPUSD?
Extending through on the bounce off of the 4-year ascending trendline support at 1.5700, the GBPUSD looks set for a test of 1.5825. A break above the figure would activate resistance at 1.5900, with medium term targets likely set at the 1.5941 38.2% resistance barrier.
Any downside correction should be held at bay by the aforementioned round figure support.
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