Cable pushed its recovery envelope from today's early Asian session five-day low of 1.9572 to a peak of 1.9641 in early European trade, as the continent absorbed Hometrack's 23:01GMT disclosure that UK house prices have risen 6.7% on an annualized basis. That number is the highest since June 2003, and is good news for UK rate hawks forecasting another 25bp base rate hike to 5.5% in Q2.
The next MPC meeting takes place next week (Apr 4/5). Sterling offers are touted at 1.9650 and 1.9660. Resistance levels above include 1.9675, 1.9690, and 1.9725/30. On the downside: bids are tipped at 1.9570 and 1.9550. The latter level approximates to the 55-day moving average. Today's key US event risk is the 14:00GMT unveiling of February new home sales.
Forecast: 993,000, up 4.9%. This week's key US event risk is Fed Governor Ben Bernanke's midweek testimony to the Joint Economic Committee of Congress. BoE Governor Mervyn King will be one of five MPC members who will testify before the Treasury Select Committee from 08:45GMT tomorrow, re: February's BoE inflation report. The others include Rachel Lomax.
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