The GBPUSD pair is in its third day of gains as investors react to a weaker dollar and strong mortgage approval data from the UK. The pair is trading at 1.3461, which is the highest it has been since December 2019.
According to the Bank of England, there were more than 66.3k mortgage approvals in the UK in July. That was significantly higher than the previous increase of 39.9k and the consensus estimate of 54.8k. As a result, mortgage lending increased to £2.7 billion from the previous £2.39 billion.
In the same month, the consumer credit increased to more than £1.2 billion from the previous decline of more than £0.38 billion.
Meanwhile, the GBPUSD pair also rose because of the positive manufacturing PMI data from the UK. According to Markit, the country’s manufacturing PMI increased to 55.2 from the previous 53.3. That increase was slightly lower than the 55.3 that analysts were expecting.
The third reason why the British pound is rallying today is the fact that the dollar is relatively weaker today. The dollar index, which measures the performance of the dollar against other currencies declined by more than 0.30% today.
GBPUSD technical outlook
The daily chart shows that the GBPUSD pair has been in a strong upward trend. It has been in the green for the past three consecutive days and is trading at the current level of 1.3464, which is the highest it has been since December. The price is above all the short and medium-term moving averages. It is also above the important resistance that is shown in purple. The momentum indicator is above the neutral line also. Therefore, the pair is likely to continue rising as bulls target the next resistance level at 1.3500.
On the flip side, a move below 1.3200 will invalidate this trend. This price is an important support because it is the March 9 high.
GBPUSD technical chart