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At the Forex currency market correction started for the British Pound Sterling rate on Tuesday morning; after two days of steady growth investors begun to question its solid supports.

Forex forecast: MACD indicator for the pair GBP/USD started to grow moderately in the negative area, shaping a sell signal; however volumes are decreasing. Stochastic Oscillator continues to grow in the neutral zone, giving a similar signal.

Forex recommendations: in case of break down at the level of 1.5620, selling target will be the levels of 1.5600 ? 1.5590.

It became known today that volume of retail sales BRC in the UK rose by 0.3% y/y in September. Thus, according to the survey of the British Consortium of Retailers volume of retail sales rose slightly on annual basis last month; however monthly dynamics is mixed. Prices for food continued to grow, demand for clothes and footwear fell despite the seasonality. Therefore, basic demand is minimal at the moment.

It became known earlier that retail price index BRC in the UK increased by 0.2% m/m (+2.7% y/y) in September. According to the agency’s estimate prices for food amounted to +0.1% m/m (+5.0% y/y) last month. As it became known earlier consumer confidence index Gfk in the UK rose to -30 points in September against -31 points in August. However, despite positive dynamics, index is still close to the historic lows and has not yet reached historic average.  The indicator has moved away from the bottom, nevertheless it is still too far from stability. Note that assessment indicator of general economic situation fell to -58 points over the last 12 months.

Statistics released earlier showed that that house price Rightmove in the UK increased by 0.7% m/m in September. Meanwhile, we can note that there is lack of offers as emphasized by Rithmove and upward pressure caused by the very low interest rates, which encouraged the growth of the house prices; plus to this low level of public confidence in economy and reluctance of people to spend money, due to obscure economic prospects.

At the meeting last week the Bank of England decided to leave interest rate unchanged at the level of 0.50% per annum, at the same time increasing volume of the assets repurchase program. Therefore, QE was increased to 275 billion pounds against the previous level of 200 billion pounds. In the follow-up comments the head of the Bank of England Mervin King said that the expansion of the assets repurchase program has been provoked by the slow growth of the global economy, however QE will have a positive impact on the British economy in the future.

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