Sterling Tests Support on Broader Dollar Strength


Sterling moved lower as the dollar continued to gain traction ahead of the December 16-17 Fed monetary policy meeting. The UK appears to be reporting stronger economic growth than Europe but weaker than the United States, which is allowing their currency to edge lower versus the greenback. The yield differential is moving in favor of the U.S. dollar which is driving the currency pair to fresh lows.

On Monday the UK released consumer lending and credit. UK October lending data came in near expectations, with consumer credit rising GBP 1.2 billion, slightly below September’s GBP 1.3 billion figure, while mortgage approvals rose to 69.6k, slightly below the median for 69.9k but above September’s 69.0k. Lending to non-financial businesses rose GBP 2.3 billion, rebounding from September’s GBP 0.9 billion contraction.

Sterling is printing in the red on the session but moved off its lows in the wake of the lending data. Prices touched a 6-month low which now places target support near the April lows at 1.4565. Resistance is seen near former support near the November lows at 1.5030.

Momentum is negative with the MACD (moving average convergence divergence) index printing in the red with a downward sloping trajectory that points to a lower exchange rate. The relative strength index is flat, and printing a reading of 36, which is on the lower end of the neutral range but above the oversold trigger level of 30.

The post Sterling Tests Support on Broader Dollar Strength appeared first on FXTM Blog.

Source:: Sterling Tests Support on Broader Dollar Strength

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