GBP drifts from early week peak – Scotiabank

House price data from Nationwide fell 0.2% in August but UK lending data suggest some renewed vigour in the UK housing market as house hunters anticipate easier BoE policy, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

GBP holds bulk of gains

“Mortgage approvals rose 62k in July, the strongest in close to two years. Net lending secured on dwellings rose GBP2.8bn, meanwhile. Sterling is up marginally on the day but spot is consolidating.”

“GBP price action over the week suggests the rally in the pound has stalled but the technical jury is still out on whether a deeper reversal or correction lower will develop. Short-term price action reflects some drift in the pound from this week’s peak and some signs of stronger fading interest on minor GBP gains.”

“GBP support is 1.3125. Resistance is 1.3200/05.”