The pound snapped a nine-day surge against the dollar as technical indicators suggested the currency appreciated too quickly. Sterling was close to a one-month high versus the euro after Lloyds Banking Group Plc said it returned to profit for the first time almost two years and a report showed U.K. house prices unexpectedly rose in July. The relative strength index on the pound against the dollar was at 75.015 today, its fourth day above 70, a level that technical analysts say indicates a currency is overbought. “There is a little bit of fatigue in the pound rally and it may pause for a while before testing some of these important levels,” said Audrey Childe-Freeman, a senior currency strategist at Brown Brothers Harriman Ltd. in London. “The news continues to come in on the bullish side for sterling.” The pound was 0.1 percent weaker at $1.5937 as of 8:49 a.m. in London. The nine-day streak of gains was the longest in more than 18 years. The British currency appreciated 0.1 percent to 82.86 pence per euro. It reached 82.55 pence on Aug. 2, the strongest since July 5. Government-controlled Lloyds posted a pretax profit of 1.6 billion pounds ($2.6 billion) in the first half, beating the 694.5 million pound estimate of 17 analysts in a Bloomberg survey. The pound retreated yesterday after touching $1.5969, a Fibonacci level created by the 61.8 percent retracement of the drop from $1.7043 on Aug. 5, 2009 to $1.4231 on May 20 this year. U.K. government bonds fell, pushing the yield on the 10- year gilt up two basis points to 3.29 percent. The two-year gilt yield also climbed two basis points, to 0.79 percent. To contact the reporter on this story: Matthew Brown in London at mbrown42@bloomberg.net

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