Forex Market: GBP/BGN trading outlook for February 29th

Friday’s trade saw GBP/BGN within the range of 2.4677-2.4947. The pair closed at 2.4798, edging up 0.08% on a daily basis. It has been the 9th gain in the past 20 trading days and also a second consecutive one. The daily high has been the highest level since February 23rd, when a high of 2.5155 was registered. In weekly terms, GBP/BGN lost 2.04% of its value during the current week. It has been the 6th drop in the past 8 weeks and also the sharpest one since the week ending on January 10th, when the pair depreciated 2.09%. GBP/BGN has fallen 3.58% so far during the current month, following two successive months of decline. In January GBP/BGN went down 3.09%.

On Monday (February 29th) GBP/BGN trading may be influenced by the following macroeconomic report listed below.

Fundamentals

United Kingdom

Consumer Lending, Mortgage Approvals

Lending to consumers in the United Kingdom probably expanded to GBP 1.325 billion in January from GBP 1.169 billion in December. This indicator represents borrowing by the UK personal sector (individuals only) to fund current expenditures on goods and services, which are a driving force behind economic growth.

What we should stress on here is the following distinction on how this indicator is to be ”read” in different macroeconomic contexts. Within a booming economy, excessively high levels of consumer lending may be taken as an indication that economy itself is set to overheat. It is so, because individuals tend to borrow money in order to live beyond their means. Within a sluggish economy, however, in case lending to individuals expanded more than projected, this would usually have a moderate bullish effect on the sterling, and vice versa. Bank of England (BoE) is to release the official numbers at 9:30 GMT.

At the same time, the number of mortgage approvals in the United Kingdom probably increased to 73 500 in January, according to experts’ expectations, from 70 837 in December. If so, Januarys number would be the highest since January 2014, when a revised up number of 76.947 mortgages approved was reported (76.753 previously). Mortgage approvals are considered as a leading indicator, reflecting the health of the country’s housing market. In case the number of mortgages approved increased more than anticipated, this would imply potentially higher demand in the nations housing sector and, respectively, a positive impulse for overall economy. Therefore, it would have a moderate bullish effect on the sterling. Bank of England will release the official data at 9:30 GMT.

Daily and Weekly Pivot Levels

By employing the traditional calculation method, the Monday pivot levels for GBP/BGN are presented as follows:

Central Pivot Point – 2.4807
R1 – 2.4938
R2 – 2.5077
R3 – 2.5208

S1 – 2.4668
S2 – 2.4537
S3 – 2.4398

By using the traditional method of calculation again, the weekly pivot levels for GBP/BGN are presented as follows:

Central Pivot Point – 2.4924
R1 – 2.5190
R2 – 2.5582
R3 – 2.5848

S1 – 2.4532
S2 – 2.4266
S3 – 2.3874