GBP: British Pound determines movement direction

At the Forex currency market the British Pound Sterling rate stands still on Wednesday morning after yesterday’s attempt to push away from local lows.

Forex forecast: MACD indicator is in the negative area for the pair GBP/USD and after breaking through the signal line from top to bottom earlier, and is giving a sell signal. Stochastic Oscillator tends to come out of the oversold zone and started to shape a buy signal.

Forex recommendations: in case of breakdown at the level of 1.6010, the target for the purchase will be the levels of 1.6040 and   1.6080.

If upward breakdown does not take place, the pair will consolidate close to the current levels.According to the representative of the Bank of England Mr. Dale, internal inflationary pressure in the UK remains relatively low, although in 2-3 years time inflation will be back at the target level. Dale believes that medium term GDP forecast should be revised downward.

The data released on Tuesday showed that final GDP in the UK (third reading) increased by 0.5% on quarterly basis (+1.6% y/y) which agreed with the forecast. At the same time level of consumer spending fell by 0.6% on quarterly basis (-0.5% y/y). in Q1 The minutes of the last meeting of the Bank of England was made public earlier. It is clear now that only two aggressive monetary politicians have been left, they are: Wheal and Dale.

A new member of the MPC, Broadbent who substituted a “hawk” Sentence, joined conservative camp. As a result, 7 votes were against the rise in the interest rate and two for it. The Pound responded with a sharp decline.The head of the Bank of England, Mervyn King said earlier that he believes it is European crisis that is the main reason for the financial instability in the country. According to him, fiscal instability could spread through financial markets and it is not clear whether Britain will be able to withstand the crisis.

It became known earlier that house prices in Great Britain fell by 0.1% m/m (-3.9% y/y) in June, as per Hometrack estimates. Houses in the UK continue to become cheaper and it is a negative signal for the economy, given the reluctance of the British to spend money. Last week, British Prime Minister Cameron stressed that situation in the Eurozone impacts negatively on the country, and the UK should not be involved in helping Greece, as Eurozone is strong enough to prevent its own collapse.

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