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The Cable is undergoing an intense pullback today, dropping beneath all of our previous uptrend lines along with 11/12 lows. The Pound is getting hit by a report from Nationwide and an analyst poll from Bloomberg implying Britian's housing recovery may be overdone and analysts are expecting a pullback in prices in 2010. These two discouraging news releases tack onto Wednesday's negative Building Permits and Housing Starts data points from the U.S. Furthermore, the fact that yesterday's British Retail Sales data printed two basis points below analyst expectations isn't helping the Pound's cause. Today's bounce in the EUR/GBP highlights the relative weakness of the Pound, yet several near-term downtrend lines due remain on this major Euro cross. Meanwhile, the S&P futures have ventured back below their psychological 1100 level. Therefore, investors should keep a close eye on the S&P's interaction with 1100 since the futures are normally negatively correlated with the Dollar. Any technically significant pullbacks in the S&P have the potential to impact the Cable with the possibility of extending the currency pair's present pullback towards previous November lows.
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