GBP: British Pound came to a standstill awaiting new catalysts

At the Forex currency market the British Pound Sterling rate almost came to a standstill on Wednesday morning; market awaits new catalysts from the U.S. Federal Reserve; meanwhile it takes up wait and see attitude.

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 is in the neutral zone, it has finished trades being along the signal line and started to go down, giving a sell signal.

Forex recommendations: in case of break down at the level of 1.5720, sales target will be the levels of 1.5690 and 1.5650. If downward breakdown does not take place, the pair will aim to 1.5830.

Statistics released this morning 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. 

Therefore, 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 this week that 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.

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 this morning 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. In general, there is no trend to risk, therefore the Pound preserves downward trend, which does not cancel short term upward correction, that will again lead to sales in case of negative developments.