GBP: British Pound came out of the range; however prospects are obscure

At the Forex currency market the British Pound Sterling rate is traded slightly upward on Tuesday, following breakdown of the upper border of its range yesterday. However, we should remember that the Pound rise, which followed after the increase in the Euro, was caused by weakness of the USD, which is now under the pressure in advance of the FR meeting today.

Forex forecast: MACD indicator is in the negative area for the pair GBP/USD and it going up, confirming a pair buy signal. Stochastic oscillator has reached the overbought zone and is giving a pair sell signal.

Forex recommendations: off the market.

Feasibel event scenario at Forex: in case of breakdown at the level of 1.5900 the pair will go to 1.5960 and 1.6000. if the level of 1.5840 is exceeded, traders’ targets will become the levels of 1.5780 ? 1.5730.

The data from RICS Agency, released today showed that the UK housing market is still at the lows of 18 months. The main reason for this is the reduction of demands for houses. Thus, houses prices index in London went up to -32% against the previous level of -49%, while index of new buyers’ requests dropped to -1-8% last month against the previous level of -12%.

Today investors will await the release of the UK consumer prices index for November (12.30 Moscow time).
It became known yesterday that, as per RIGHTMOVE estimations, houses prices declined by 3% on monthly basis in December (+0.4% y/y). However, the bulletin of the Bank of England stressed that British households have already experienced repercussions of the significant reduction of the budget costs.

Last week the Bank of England decided to leave current interest rate unchanged at the level of 0.50% per annum, the volume of the assets redemption program was also left unchanged. These decisions agreed with the market expectations. In addition it also became known that foreign trade deficit with the exception of the Eurozone countries was revised to the level of 8.4% billion pounds sterling.

British ex-Prime Minister Gordon Brown believes that problems of Eurozone will have an impact on British economy. As long as the Eurozone fails to cope with the Euro decline, preconditions for a new crisis in the banking system will stem in the area. At the same time Eurozone is unlikely to handle this situation without losses and therefore, neighbors will be also involved. 

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