GBP: British Pound determines movement direction at the beginning of the week

At the Forex currency market the British Pound Sterling is traded languidly on Monday morning however with a slight increase.

Forex forecast: MACD indicator is in the negative area for the pair GBP/USD however it goes up slightly which gives ground for a pair buy signal. Stochastic Oscillator is giving a similar signal today, being in the neutral zone.

Forex recommendations: if external background is maintained positive, buyers' targets will be the levels of 1.6110 and 1.6155.

If favourable scenario is not implemented, consolidation of the pair around the current levels can take place. Macro-economic calendar is not eventful today; therefore external background will have basic effect on trades.

The UK statistics released last week was positive in general. Unemployment rate remained at the level of 4.5% in October; while the number of unemployed reduced by 3.7 thousand (in September: +1.3 thousand). Average weekly earnings in the UK increased  by 2.2% in September excluding bonuses. In addition, the minutes of the Bank of England last meeting was released in the middle of last week, in general it did not say anything new. Thus, Sentance is still of the opinion that the rates should be raised to 0.75%.

The document also stresses that it will be wrong to start monetary policy tightening, while having a lot of spare capacity in economy. The regulator believes that monetary committee has not assessed in full the effect of the budget expenses reduction. Representative of the Bank of England Mr. Posen noted earlier that he has not changed his opinion regarding the necessity of monetary policy easing in Great Britain. He stressed that his growth forecast in the country is well below forecasts of other members of MPC, as reduction of budget expenditures will inevitably cause reduction in the household consumption. According to him instruments, which are available to the regulator cannot always be fully effective in combating the bubbles -Posen is convinced that inflation of the stock market bubbles would be very difficult to track.

According to the report of the British Industry Confederation, industrial production in the UK will remain moderate over three months, although more and more British companies intend to expand spending to ensure clients requests.

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