It was another range bound session for GBP/USD Wednesday as the sterling found little comfort in the strong one percent advance in the domestic stock market and instead focused on disappointing results from the UK’s largest home builder. Taylor Wimpey reported a 1.4 billion pound loss through the first half of the year, leading macro investors to forecast an inevitable recession.
However, this earnings report is merely a corporate reflection of what economic data has already warned us of, that tumbling home prices and sales has lead to a drop in construction activity. And, where the market influence of this data ends, major technicals have taken up the pound’s cause with a major Fibonacci retracement at 1.83. Looking ahead to tomorrow, the fundamentals may have a greater impact on price action. The Nationwide housing price report, CBI Distributive Trades report and GfK Consumer Confidence survey are all scheduled for release. This should offer a good read on the housing, business and consumers sectors’ impact on growth going forward.