GBP/USD Should Turn Bullish if New Home Sales in US Fails to Meet Estimates

Last Updated on October 26, 2020

United States – New Home Sales

On Monday at GMT 2:00 p.m., the United States Census Bureau will release the New Home Sales figure. It measures the annualized number of new family homes sold during the last month.

The sale of a new home usually causes an increase in a wide ranging economic activity, such as sales of new furniture, new mortgage for the home, etc. Binary options traders considered the New Home Sales figure to be a leading fundamental indicator of the US economy.

Last month, on a year-over-year basis, total 662,000 new homes were sold in the United States. This month, the consensus forecast is that it will came out at 665,000.

United Kingdom – Net Lending to Individuals

On Friday, at GMT 8:30 a.m., the Bank of England will release the month-over-month net lending to individuals figure. It measures the changes in the total value of new credit issued to consumers in the past month.

Consumer spending is highly correlated with consumer credit.  Binary options investors consider that the net lending to individuals figure can indicate future consumer spending as well as consumer confidence in the economy. This is because people only take on debt when they feel financially secure about future incomes.

Last month, the last net lending to individuals figure came out at 5.7 billion. The forecast for today is set at 5.3 billion.

GBP/USD Forecast

Since forming a bearish pin bar on April 17, the GBP/USD remained high bearish. Over the last two months, the GBP/USD price has gone down by around 1260 pips. After reaching near the 1.3100 level, it found a strong support and jumped back towards the pivot zone around 1.3300.

The UK’s Net Lending to Individuals figure is set to decline to 5.3 billion. By contrast, the US new home sales figure is set to increase to 665,000. We believe it would set a bearish fundamental outlook for the GBP/USD this week. However, if the new home sales figure fails to meet the estimate and comes below 660,000, the market will swiftly turn bullish.  In that situation, if the GBP/USD breaks above the resistance near 1.3300, it would likely attract additional bullish momentum in the market.

Hence, US binary options traders should look out for trading opportunities above this major resistance level around 1.3300.

BTC/USD Forecast

There was plenty of positive news regarding bitcoin and overall cryptocurrencies last week. First, the US Federal Reserve announced it will add four cryptocurrency price trackers to its research database. Doing so will further advance the cause of pushing cryptocurrencies in the mainstream economic research. The second news came from the Toronto Stock Exchange (TSX) as announced to list a new blockchain-based ETF called the Horizons Blockchain Technology and Hardware Index ETF fund.

Both turned out to be bullish for bitcoin price and the BTC/USD formed a large bullish bar on the 240-minute chart. Given the current momentum in the short-term chart, there is a good possibility that the BTC/USD price will break above the pivot zone around 6150.

Hence, US bitcoin traders should look out for trading opportunities above this major resistance level around 6150.

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