GBP: British Pound has not groped for the bottom yet

At the Forex currency market the British Pound Sterling rate continues to decline on Tuesday due to intensification of the external negative factor.

Forex forecast: MACD indicator is in the negative area for the pair GBP/USD, and is moving along the signal line, not giving any signal. Stochastic Oscillator is going down in the neutral zone, it has reached oversold zone, giving a sell signal.

Forex recommendations: n case of breakdown at the level of 1.5840 the pair will go to 1.5820 and 1.5790.

There are no reasons for buying Pound despite its fairly attractive levels: external background remains negative for opening long positions and the pair GBP/USD does not have its own growth catalyst.The head of the Bank of England Mr. Mervyn King noted yesterday that in the next couple of years inflation in the country shall revert to the level of 2.0%.

According to him, current monetary policy is quite logical and its aggressive tightening in the past and this year had been an unwise step.The meeting of the Bank of England was held last week: interest rate was kept unchanged at the level of 0.50% per annum. Statements on the monetary policy have not been made. It is likely that the rate will remain at the current level until Q1 2012.

The minutes of the meeting will be made public on 20 July.It became known today that comparable sales index BRC in Great Britain reduced by 0.6% in June against the slump by 0.2% y/y in May.Economists of JP Morgan reported last Friday that they have revised the UK GDP downward: most likely economy of the country will be either flat in Q2, or will demonstrate slight rise by the end of Q2.

By the way, as predicted by OECD, British economy will rise by 0.1% in Q2.  According to the forecast made by NIESR, GDP in Great Britain will rise by 0.1% in June against the revised level of 0.5% in May. It is logical, because economic situation in the UK remains tense.

According to Barclays estimates, British Pound is going to be pessimistic in pairing with the USD, which will be caused by low demand in the country and probability of a new stage of decline in confidence. Position of the bank of England does not facilitate strengthening of the GBP either. Most likely loss of   confidence in the finance and monetary policy of Great Britain will be continued - and it is a negative factor for the GDP. Although exchange rate remains low, eliminating sharp collapse of the Pound.  

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