Due to a rebound of the European stock market, the British currency managed to outperform all other major peers on Monday. The Pound set off with rather solid gains of 0.61% against the Yen and 0.54% versus the US Dollar, while lesser rallies were registered against the remaining major currencies. The Sterling added only 0.28% against the Euro and 0.23% versus the Swiss Franc, whereas concerning the commodity currencies, the GBP surged 0.24%, 0.21% and 0.11% against the Loonie, the Aussie and the Kiwi, respectively. The rebound in oil prices was the main reason of lesser gains against commodity-based currencies.
UK house prices rose to a record in April as a strong labour market and ultra-low interest rates continue to support house price growth in Britain. Average asking prices rose 1.3% from March to 307,033 pounds, according to the Rightmove property portal. On an annual basis, prices were 7.3% higher. The data revealed that the price change in April was driven upward mainly by larger and more expensive properties, whereas the price of smaller properties purchased by first-time buyers experienced a monthly decline of 1.4%.Mortgage provider Halifax reported earlier this month reported that house prices had advanced in the three months to March, surging 10.1% above the level recorded during the same quarter last year. Prices also climbed when measured on a monthly basis, by 2.6%, recovering from a decline of 1.5% a month before, Halifax said. Despite this surge in the first quarter, Halifax said housing market activity should slow in the second half of this year.
The number of mortgage approvals growth slowed only slightly to 73,871 in February, compared with 74,085 a month before, but remained close to January's two-year peak, according to the Bank of England.
US Building Permits is the only relevant fundamental release today
GBP/USD attempts to climb over 1.43
The Sterling surprisingly recovered on Monday, due to the European stock market rebound triggering demand for riskier assets. As a result, the Cable completely erased last week's gains, also breaking out of the falling wedge pattern earlier than anticipated. The bullish momentum is now likely to prevail, leading the exchange rate closer towards the resistance line at 1.45. The closest area to limit the gains is represented by the weekly R1 at 1.4339, but we should not rule out the possibility of the fundamentals pushing the GBP/USD pair back towards 1.42, as technical indicators retain their bearish signals in all timeframes.
Daily chart
Hourly chart
Sentiment remains bullish
Bulls lost some numbers, as 57% of traders hold long positions today, compared to 65% on Monday. Meanwhile, the portion of orders to sell the Pound edged higher, namely from 55 to 64%.
Concerning the sentiment of other market participants, OANDA once again has a positive outlook towards the Cable, as 57% of their open positions are long, compared to 54% on Monday. Meanwhile, the sentiment at Saxo Bank remains bearish, with 55% of all open positions now being short and the remaining 45% being long.
Spreads (avg, pip) / Trading volume / Volatility
Majority sees GBP/USD below 1.44 in three months