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GBP: optimism of the British Pound gained a victory at the end of the week

At the Forex currency market the British Pound Sterling rate is traded upward on Friday, continuing yesterday’s growth.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and is slowly going down, giving a pair sell signal. Stochastic Oscillator has come into overbought zone today and is giving a pair buy signal.

Forex recommendations: if current sentiment at the market maintains, and in case of breakdown at the level of 1.6185/90 the pair will go to 1.6230 and 1.6250.

According to the representative of the MPC Mr. Sentence, inflation outlook, made public by the Bank of England, is overly optimistic. He believes that downside risks to inflation are underestimated in the report of the regulator and the rates should grow more actively. At the same time Sentence does not see any special signs of the Pound Sterling consolidation

In addition, the head of the Bank of England Mervyn King emphasized that he can see imbalance of economic system in the country and does not approve market’s expectations of the interest rate increase. He reiterated that the regulator has never reported on the increase of interest rates in advance.

We would remind that statistics released earlier showed that level of CPI in the UK increased by 0.1% m/m (+4.0% y/y) in January against the growth by 3.7% y/y in December.

As the study, made by CEBR, the Center of Economic and Business Research, indicates, the clouds continue to thicken over the British real estate market, which was especially evident last month. Thus, according to the estimates of the Center, houses prices will drop by 1.7% in the UK this year versus estimates of growth by 2.2%, made in November. It is worth noting that the forecast was lowered up to 2014, to 9.1% against 16% previously.    

In general, current outlooks for the pair GBP/USD seem optimistic.

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