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At the Forex currency market the British Pound Sterling rate is traded downward on Tuesday after yesterday’s recovery – investors’ risk aversion was caused by new information from Japan.

Forex forecast: MACD indicator is in the negative area for the pair GBP/USD and it goes down, giving a sell signal. Stochastic Oscillator is moving upward in the neutral zone on Tuesday, giving a pair sell signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.6160 the pair will go to 1.6180 and 1.6200. If the level of 1.6100 is exceeded, traders’ targets will be the levels of 1.6070 and 1.6050.

Macro-economic calendar was uneventful on Monday; external background was the main movement driver. Following the meeting of the Bank of England last week it became known that interest rate was kept at the previous level of 0.50% per annum, volume of debt securities repurchase was also left unchanged, 200 billion pound sterling.

The Pound responded to the lack of allusions regarding the start time of the monetary policy tightening by drastic decline. Objectively levels of inflation have been above the levels indicated by the regulator for over a year already, increasing pressure on the recovery of the British economy which is not too steady. Meanwhile interest rate is kept at the level of 0.5% per annum. The increase of VAT in the UK at the beginning of this year contributed to the growth of prices in British shops – the index rose to 24 month highs on annual basis in February. According to the estimates of BRC retailers’ prices rose by 2.7% y/y last month against the rise by 2.5% in January.

The data of Friday showed that production in the British construction sector reduced by 7.5% m/m in January; however it increased by 5.6% on annual basis. The index fell by 16.6% y/y earlier in December due to harsh weather conditions. 

The data on production output of Great Britain for January became known yesterday – the index has increased rapidly over the past 16 years (+1.0% m/m, +6.8% y/y) while the forecast of growth by 0.8% m/m. Statistics been particularly strong compared with the decline of the index in December last year.

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