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At the Forex currency market the British Pound Sterling rate started to trade downward on Monday morning – Friday’s correction didn’t last long and the external background remains disturbing.

Forex forecast: MACD indicator for the pair GBP/USD continues to go down in the negative area, giving a sell signal; volumes are increasing. Stochastic Oscillator stays in the oversold zone, giving a sell signal.

Forex recommendations: in case of break down at the level of 1.5430, sales target will be the levels of 1.5410 and 1.5380. If downward breakdown does not take place, the pair will consolidate close to the current levels.

The external background remains the main sell catalyst for the British Pound – still investors are not disposed to buy because of risks in spite of the fact that the currency is at very attractive levels.

According to the statistics mortgages are reviving in Great Britain: BBA Mortgage Approvals reached 35,226 k in August against the forecast of 33,250 k. The indicator jumped to 2010 highs. One should note that refinancing approvals totaled 27,114 k against 26,229 k before.

In this case the earlier data doesn’t seem strange: house prices Rightmove increased by 0.7% m/m in September. The data on the real estate sector from other leading agencies will be known soon, which will provide a clearer outlook. Meanwhile, we can see the lack of offers as it emphasized by Rithmove and upward pressure from the very low interest rates, which encourage the growth of the house prices; plus to this low level of public confidence to economy and reluctance of people to spend money, caused by obscure economic prospects. 

The data released earlier showed that consumer confidence index Nationwide amounted to 48 points in August versus preliminary level of 49 and the forecast of 47 points. It is not yet the cause for optimism; nevertheless index of expenditure demonstrates increase: it had been 79 in August against preliminary 72. Consumer confidence is stable so far; although it remains in close proximity to historic lows. People are ready to spend money; however clearer economic outlooks are required for them to gain more confidence.

It became known earlier that retail sales in the UK fell by 0.2% m/m, in August; the index has not changed on annual basis. In addition, Mr. Cable said that program QE will enable economy to regain both consumer and business confidence if they press ahead with a program in the same volumes. The data released earlier was interesting: index of retail sales in the UK amounted to +0.6% m/m (+5.2% y/y), which agreed with expectations. In addition, consumer price index CPI rose by 0.6% m/m (+4.5% y/y) in August against the forecast of growth by 0.6% m/m.

Minutes of the last meeting of the bank of England which was made public at the end of the previous week, took market by surprise: all 9 members of the Monetary Committee voted to maintain interest rate at the low levels. Nevertheless, MPC started to contemplate seriously about expanding of the QE program.

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