Forex Analytics from LiteForex of 02.11.10: GBP: British Pound continues to grow after a short break

At the Forex currency market the British Pound Sterling rate continues to go up following the pair EUR/USD. However in the light of the uncertain sentiments at the world capital market it would make more sense to stay out of the market.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and it goes down giving ground for a pair sell signal. Stochastic Oscillator has not indentified a signal today.

Forex recommendations:  off the market. 

Feasible event scenario at Forex: in case of breakdown at the level of 1.6080 the pair will go to 1.6140 and 1.6190. If the level of 1.6020 is exceeded traders’ targets will become the levels of 1.5950 and 1.5910.

The UK news was not released today however the trading at the market is carried while external background is kept in view. A two day meeting of the U.S. Federal Reserve also imposes some effect on trading.

It became known yesterday that houses requested prices reduced by 0.9% m/m (-0.1% y/y) as per Hometrack estimation. Economists pointed that pace of decline accelerated after some stagnation while the annual rate of decline had been observed for the first time in January this year. It became known last week that the UK houses prices as per Nationwide estimation continued to decline in October and fell by 0.7% on monthly basis (+1.4% y/y). Nationwide economists point that if the trend which started in the early summer continues in November and December, the prices will have chances to drop by 1% by the end of the year.

Posen, representative of the Bank monetary committee pointed earlier that the rise in inflation above the target level even by 1% will not be crucial and it will take some time – longer than previously expected to set quantitative easing of monetary policy. Posen does not believe that additional stimulation is required for the British economy now. The head of the Bank of England Mr. King noted that the draft Basel III which has been discussed last month will not become a miracle cure for the new round of financial crisis. However according to the monetary politician, British regulator will not force banks to comply with the contract although he holds   more stringent views on the problem.

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