Forex Analytics from LiteForex of 11.11.10: GBP: British Pound Sterling continues to grow

At the Forex currency market the British Pound Sterling rate continues its growth, which started yesterday.
Forex forecast: MACD indicator is in the negative area for the pair GBP/USD, however it goes up, giving a pair buy signal. Stochastic Oscillator is
giving a similar signal today, being in the overbought area.

Forex recommendations: in case of breakdown at the level of 1.6175, buyers' targets will be the levels of 1.6230 and 1.6290.
The UK statistics was not published today; however market still remembers statement made by the Bank of England yesterday, which was very optimistic, proposing that the country's economic recovery will accelerate next year. However, weakness of the housing market is too apparent on the general background. Statistics, released earlier showed that that comparable retail sales BRC increased by 0.8% y/y in October; total retail sales: +2.4% y/y and houses prices balance RICS in October:-49%, the minimum since 2009. It became known earlier that level of asking prices for houses 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 level 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 has started in the early summer will continue in November and December, the prices will have chances to drop by 1% by the end of the year.

The International Currency Fund believes that the Bank of England should continue to stimulate economy as it seems at the moment that it is necessary to compensate the reduction of the budget expenses. Slow recovery of the banking system in the country is another factor which speaks in benefit of such measure.

This week statistics was positive for Great Britain as a whole - the UK industrial production increased by 0.4% in September, which agreed with the
forecasts and which was able to support the Pound for a while, however pressure exerted by the external background was higher.

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