Forex Blog
Blog-FX.Com

The British Pound Sterling rate is traded downward at the Forex currency market on Thursday, as investors' interest in risk remains very low. 

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: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.5600, targets for selling will be the levels of 1.5590 and 1.5570. If downward breakdown does not take place, the pair will consolidate at the current levels. Sale of the GBP is of emotional nature, as from the fundamental point of view, situation in the British economy is stable.

According to the data released yesterday, PMI in the construction sector rose to 53.2 points against expectations of 52 points. In addition it became known in the middle of the week that net consumerlending amounted to 0.394 billion pound in November against the forecast of 0.3 billion pounds. Number of approved mortgage applications in the same monthincreased to 52.854 thousand against the previous level of 52.786 thousand. It became the maximal level since December 2009. 

The data released earlier showed that PMI CIPS in manufacturing sector increased to 49.6 points in December against 47.7points in November. It is definitely the positive data; however the fact thatthe index is below the level of 50 points proves that downward risks are stillpreserved. It is quite clear that European debt crisis continues to harm economy of the UK. It is also obvious that in the next quarter economic growthrate in Britain can drop even more significantly. 

It became known earlier that CPI in GreatBritain increased by 0.2% m/m (+4.8% y/y), as expected. Therefore, Britishinflation is slowing down its pace; however the index is still too far from thetarget level for the Bank of England. The Bank of England announced earlierthat average inflationary expectations reduced to 4.1% in November against the level of 4.2% in August. At the same time, the level of two-year inflationaryexpectations was around 3.4% (3.5% previously). It is also worth noting thatthe Bank of England expects stagnation in the economy in the next quarter andGDP growth in Q1 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 above preliminary assessment, which was appreciated in the market.

Tags: