Aug. 4 (Bloomberg) -- The pound traded near the highest level in more than six months after Lloyds Banking Group Plc returned to profit for the first time in almost two years and a report showed U.K. house prices unexpectedly rose in July. Sterling fell earlier, snapping a nine-day surge against the dollar, after a report showed U.K. services growth slowed to the lowest in 13 months in July and technical indicators suggested the currency appreciated too quickly. The relative strength index on the pound against the dollar was at 75.67 today, its fourth day above 70, a level that technical analysts say indicates a currency is overbought. “The news continues to come in on the bullish side for sterling,” said Audrey Childe-Freeman, a senior currency strategist at Brown Brothers Harriman Ltd. in London. Still, “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,” The pound was little changed at $1.5947 as of 1:36 p.m. in London. The nine-day streak of gains was the longest in more than 18 years. The British currency traded at 82.85 pence per euro from 82.94 pence yesterday. 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. House Prices U.K. two-year government bonds notes fell, pushing the yield up three basis points to 0.8 percent. The 5 percent security due March 2012 fell 0.055, or 55 pence per 1,000-pound face amount, to 106.63. The 10-year gilt yield rose two basis points to 3.29 percent. U.K. gilts returned 6.3 percent this year, compared with 6.8 percent for German government bonds and 6.7 percent for U.S. Treasuries, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. --Editors: David Clarke, Peter Branton. To contact the reporter on this story: Matthew Brown in London at mbrown42@bloomberg.net To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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