9 July 2009

GU Analysis:
U.K. house prices unexpectedly fell in June, a sign Britain has yet to shake off the property slump as unemployment increases, a report by Halifax showed. Home values declined 0.5 percent to an average of 157,713 pounds ($253,400), after jumping 2.6 percent in the previous month, the division of Lloyds Banking Group Plc said in a statement today.

In the US, there was no mjor news. Stocks finished mostly lower after zigzagging for much of the day Wednesday. A mixed outlook on the economy from the International Monetary Fund and falling commodity prices added to the downbeat mood.

GU form a good doji ranging from 1.6138 and 1.5984, strongly supported at EMA55 on the daily chart.

Today, at 1700SGT, The Bank of England is expected to ask the British government for the authority to pump another 25 billion pounds ($40 billion) into the financial system at the end of its two-day monthly meeting Thursday. The central bank's monetary policy committee is expected to keep interest rates unchanged meanwhile at a record low 0.5 per cent.

The effect shows that UK ecnonomy is still recovering and if so, may bring the pound lower.

On the support we, have the next big one at 1.577. But to reach this line today may not be quite possible. Given half way mark, it will be 1.59.

On the up side, resistance is at 1.628, clearing this may pave way for Gu to go higher.

Trend: down.