FXStreet (Barcelona) - Chief Analyst Valeria Bednarik suggests that UK early data turned out to be disappointing in all fronts, except for house prices that rose by 9.9% yearly basis, which is not actually such great news, as housing prices rising are starting to be a concern for the BOE, worried about a hard landing on the sector.
“The GBP/USD suffered a small knee jerk, down to 1.6937 finding support in a strongly bullish 20 SMA according to the 4 hours chart.”
“Market players may decide to wait until the release of BOE’s Minutes tomorrow, to decide whether the rate hike will come before the year end, leaving today’s reaction to bad news contained.”
“Nevertheless, the same chart shows indicators started correcting the extreme overbought readings, with momentum down near its midline, and RSI reentering from +70, as price holds above 1.6950.”
“A break below mentioned daily low is now required to confirm a leg lower on the day, with next support in the 1.6910/20 price zone; only below this last bears will take the lead, looking then for a dip down to 1.6870/80 price zone.”
“On the other hand, price needs to recover above 1.7000 to regain it's upward strength, looking then for a quick test of 1.7040, August 2009 monthly high.”