Housing Price Dip Turns British Pound Trend Down

A softer U.K.housing report is overshadowing this afternoon’s U.S. Federal Open MarketCommittee announcement as falling house prices increased jitters in an alreadyfragile economy.

A softer U.K.housing report is overshadowing this afternoon’s U.S. Federal Open MarketCommittee announcement as falling house prices increased jitters in an alreadyfragile economy.

Early in the trading session, a report from the RoyalInstitution of Chartered Surveyors said July house prices turned negative forthe first time since July 2009. This report resonates other reports that showeda rising supply of houses for sale and decreased buyer interest. The return ofa buyers market indicates the strong possibility of a softer housing marketthrough at least the end of the year, leading to speculation of a double-diprecession.

Technically, after failing to follow-through to the upsidefollowing the penetration of a major Fibonacci retracement level at 1.5967 intwo out of the last three trading session, the British Pound took out a mainswing bottom at 1.5819. This move turned the main trend down on the dailychart. The chart pattern suggests that 1.5633 is the next likely downsidetarget, followed by an uptrending Gann angle at 1.5400.

Concern about a slow down in the global recovery is alsopressuring the Euro. Before the New York session opening, the Euro is trading on its low,threatening to turn the main trend to down on the daily chart on a move throughthe last swing bottom at 1.3119.

Based on the range of 1.1876 to 1.3334, the chart indicatesthat this current break could turn into something substantial if investorsdecide to begin shedding risky assets. If this current break turns into a hardcorrection, the daily chart indicates that 1.2605 would be the minimum downsidetarget. This price represents a 50% correction of the June to August rally.

James A. Hyerczyk has been actively involved in the futures markets since 1982. He has worked in various capacities within the futures industry from technical analyst to commodity trading advisor. Using W. D. Gann Theory as his core methodology, Mr. Hyerczyk incorporates combinations of pattern, price and time to develop his daily, weekly and monthly analysis. His firm, J.A.H. Research and Trading publishes The Forex Pattern Price Time Report... More

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