Selling pressure is building in GBPUSD, and it seems the only thing holding the pair back is technical support and inflation hopes. Friday’s selloff was revived this morning after the Rightmove House Prices indicator crossed the wires in worse shape than fundamental traders had expected. There was no official consensus attached to the report, but steady trend and sustained credit problems through the past few weeks suggested the reading would be yet another negative print. Officially, the 3.2 percent drop in prices for their December period marked the biggest monthly decline in five years. More discouraging than the sizable decline though was the fact that London prices were guiding the headline reading down, as the residential market in the capital represents a significant source of private investment. After this data hit the ticker, GBPUSD dropped for an exact touch of 2.01, though an 18-month old trend took the steam out of selling. Tomorrow’s inflation data could be a deciding factor for the pound’s long term trend with the MPC having already gotten the first rate cut out of the way.
Written By: John Kicklighter, Currency Analyst for DailyFX.com
Al Bawaba
