At 3am ET on 7/6/11 the Halifax House Price Index came out at 1.2% vs fcast of 0.1%. At that moment there was a bearish move in GBP. With a stronger than expected housing market reading, I would expect a bullish move in GBP. Would appreciate some insight into why GBPUSD took a dive at 3am ET on 7/6.

The link to the release is here:

https://www.lloydsbankinggroup.com/media/pdfs/2011/HousePriceIndexJune2011.pdf

The 1.2% rise in house price was good news and should have supported GBP. However you will also note the statement

"The market is, however, likely to continue to face significant headwinds which are expected to constrain housing demand. Low earnings growth, higher taxes and relatively high inflation are all continuing to put pressure on household finances."

This statement is not really bullish.

Actually GBPUSD was in a stable downtrend prior to the release. The release of the data halted the downtrend for about three hours, before it continued. This means that the market ignroed the "good" news as other subjects, such as the European Sovereign Debt Crisis were dominating.

Appreciate your response Fat Tails.