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The British Pound Sterling rate is traded considerably upward at the Forex currency market, amid investors’ growing interest to the risky assets.

Forex forecast: MACD indicator for the pair GBP/USD is traded in the negative area and is moving along the signal line, not giving a clear signal. Stochastic Oscillator is going up in the neutral zoneand is giving a buy signal.

Forex recommendations: in case of breakdownat the level of 1.5680, targets for buying will be the levels of 1.5690 and 1.5720. If upward breakdown does not take place, the pair will consolidate atthe current levels.

According to the data released earlier, index PMI CIPS in manufacturing sector increased to 49.6 points in December against 47.7 points in November. It is definitely the positive data; however the fact that the index is below the level of 50 points proves that downward risks arestill preserved.

It is quite clear that European debt crisis continues to harm economy of the UK. It is also obvious that in the nextquarter economic growth rate in Britain can drop even more significantly. 

It is also worth noting that the Bank ofEngland expects stagnation in the economy in the next quarter and GDP growth inQ1 next year. Revised GDP in the UK rose by 0.6% q/q (+0.5% y/y) in Q3,statistics released earlier has supported buyers. The index is abovepreliminary assessment, which was appreciated in the market.

According to the data released earlier CPI inGreat Britain increased by 0.2% m/m (+4.8% y/y), as expected. Therefore,British inflation is slowing down its pace; however the index is still too farfrom the target level for the Bank of England. 

The Bank of England announced earlier thataverage inflationary expectations reduced to 4.1% in November against the levelof 4.2% in August. At the same time, the level of two-year inflationaryexpectations was around 3.4% (3.5% previously).

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