Pound at Higher Ground – The Road North is Open

The British Pound made a push forward in it’s journey upwards, getting close to 1.61. As aforementioned, serious resistance appears only at 1.67, so the road north is open. Review and Outlook…

Last week, the British Pound broke strong resistance levels and closed above 1.59. This week’s scary news from North Korea ignited risk aversion. The dollar began the week stronger, and also the British Pound was hurt.

Today, GBP/USD moved forward, broke the round 1.60 line and got closer to 1.61. This happened despite BBA Mortgage Approvals being worse than expected. British mortgages were expected to rise to 29.1K, but rose only to 27.7.

The Pound made the move as American Existing Home Sales scored better than expected. Existing Home Sales stood on 4.68 million, instead of 4.65M that was expected. This is a nice rise from 4.55 million. OK, this can be explained by risk appetite, like yesterday. Risk appetite means dollar selling across the board.

Well, that didn’t happen. The Pound stood out while other currencies hardly moved. Take the Euro for example: EUR/USD now trades under 1.40. It didn’t make any break upwards. Also the Swissy and the minors are still lagging behind.

So, the explanation can be technical. The Pound has no significant resistance lines for around 600 pips. It could move forward quite easily, while other currencies are still struggling.

Tomorrow, CBI Realized Sales will be published in Britain. This is a very significant figure that is expected to turn positive. This figure will get into the melting pot with lots of American figures. Read the outlook for the greenback: Contraction or Retraction?