GBP: British Pound became a target for sale

At the Forex currency market morning the British Pound Sterling rate is traded downward on Monday, as interest in risk is very low at the market.

Forex forecast: MACD indicator for the pair GBP/USD remains in the positive area and goes down rapidly, giving a sell signal, while volumes are low. Stochastic Oscillator remains in the oversold zone and is giving a similar signal.

Forex recommendations: in case of break down at the level of 1.6160, the target for sale will become the levels of 1.6150 ? 1.6120.

Economic situation in Great Britain has not changed significantly this morning. Low interest in risk is unfavourable factor for the Pound; traders are not in a hurry to make purchases because of the obscure external prospects. It is obvious now that the GBP cannot expect support from anywhere until significant improvements will take place in the external background. Although technical rebound can become an exceptional option, however after that the pair will be on sale again.

Preliminary GDP in the UK increased by 0.2% on quarterly basis (+0.7% y/y) in Q2. The head of the Bank of England Mr. King noted this week commenting inflationary indices that, CPI can easily reach 5% and MPC can use interest rate or QE to control risks, if the need be.

It became known earlier that PMI CIPS in the manufacturing sector of the UK was at the level of 49.0 points in August against the forecast of decline to 48.6 points and the level of 49.1 points in July.

According to the data released today consumer confidence index GFK/NOP in the UK fell to -31 points in August against the level of -30 points in July. This index, which is one of the most objective assessment   of consumer confidence in the UK, is now below the lows of 1970, the time of recession in the country Note: that this index indicates consumers’ economic expectations for the next 12 months.

Unemployment rate in the UK was at the level of 4.9% in July. At the same time, level of unemployed increased by 37.1 thousand. CPI in the UK fell by 0.1% m/m (4.2% y/y) in June against the forecast of growth by 0.2% m/m.

As it became known earlier net volume of borrowing in the public sector of Great Britain was at the level of -stg1.961 billion in July against the value of stg1.350 billion in June. In addition, other indices also showed that volumes of various public borrowings also went down, indicating fairly high level of effectiveness of the current economic programs.

It became known earlier that index of consumer optimism in the service sector of Great Britain fell by 29% in Q3, as per CBI estimates, against the growth of 10% in Q2. At the same time, the Bank of England expected the growth of the index to the more optimistic levels in Q3 - statistics showed the opposite: optimism is fading away in the current quarter, and volume of business operations reduces in parallel. Despite such gloomy indications, CBI expects stabilization of the situation in Q4.

A meeting of the Bank of England will be held this week, will be interesting to know follow-up comments of the monetary authorities.