A monthly report released by IHS Markit showed that change of house prices in the UK did not justify analysts' expectations. While majority of experts anticipated an increase of 0.1% in April, the revealed data showed the opposite result. Despite the minor fluctuations, UK house prices, in general, remained unchanged for the last three months. The reason behind price stagnation is partly based on the fact that the dynamics of home sales in March and April was very similar to January and February, and remained in line with the two-year average. In addition, experts referred to the deficit of supply in the market, as the number of houses available for purchase fell for the 13th consecutive month. In a more general context, a decrease in the pace of job creation as well as rising inflation also reduced consumers' ability to acquire new houses.
On the other hand, analysts noted that confidence in the UK housing market is gradually improving, following a record fall after the Brexit referendum in June 2016. This fact in conjunction with very low mortgage interest rates should offset the abovementioned constraints and slightly raise housing prices.
No important data releases until Wednesday
GBP/USD hovers above the weekly pivot point
On Monday, the GBP/USD currency pair behaved in accordance with expectations, having edged slightly lower, with the weekly PP limiting the intraday losses. Although the Cable should continue edging lower, the technical indicators suggest a positive outcome is possible, but with the 1.30 mark remaining unmatched. However, due to lack of potential market movers, the Sterling is also capable of trading relatively flat against the US Dollar today, with risks still skewed to the upside. Ultimately, the 1.3120 handle should be the overall ceiling and the 1.2750–the bottom, as these levels mark the borders of the broadening rising wedge pattern, where the Cable is currently traded in.
Daily chart
Hourly chart
Traders remain neutral
Traders retain a neutral outlook towards the Pound, with 51% of all open positions being short and the other 49% being long. At the same time, the number of purchase orders inched up from 54 to 56%.
A less optimistic situation is observed elsewhere. The sentiment at OANDA remains bearish, namely 63% of all open positions are short and the remaining 37% are long. Meanwhile, sentiment at Saxo Bank slightly improved, but still remains strongly bearish, with 60% of traders now being short and the other 40% - long on the Sterling against the US Dollar.
Spreads (avg, pip) / Trading volume / Volatility
Traders still indecisive
By the end of the next three months traders believe the Cable is to rise above the 1.30 major level, as 60% of survey participants believe so. While the current price is around 1.29, the average forecast for August 09 is 1.3035. The 1.30-1.32 and the 1.32-1.34 ranges are now the most popular price intervals, both having 16% of the votes, while second comes the 1.34-1.36 interval with 13% of the voters, and the third place is tied by 1.28-1.30 and 1.36-1.38, with 11% of poll participants choosing either option.