GBP: British Pound is recovering while still being in the range

At the Forex currency market the British Pound Sterling is traded upward on Thursday while still being in the four -days range of 1.5430-1.5650.

Forex forecast: MACD indicator is in the negative area for the pair GBP/USD, however it continues to regain, confirming a previous buy signal for the pair. Stochastic oscillator is giving a similar signal today, being in the neutral zone.

Forex recommendations: if market’s bullish sentiments will be maintained and in case of moderate prudence, buyers’ targets will be the levels of 1.5570 ? 1.5590. Otherwise the pair will continue to consolidate within a range.

The UK statistics released earlier has become a good support for the GBP (level of money supply in Great Britain increased by 3.3% on monthly basis in November; number of approved mortgage requests rose slightly, although level of net mortgage lending declined to 788 million pounds sterling in November against the level of 1.172 billion pounds in October.)

In addition, representative of the Treasury Mr. Osborne stressed on Tuesday that country’s authorities do not yet plan to raise taxes, which urged traders to buy GBP.

According to the British financial press, all those measures on budget savings adopted by the authorities of Great Britain earlier will be continued in order to reduce the level of budget deficit in the country. Observers believe that the risk of repeated recession is low and the reduction of government expenditures along with the rise of taxes does not give grounds for this.

However, many experts continue to assess reduction of budget spending in Great Britain as an excessively risky step.

CIPD, the UK Institute of Personnel Development believes that the situation in the employment sector can be complicated for UK economy in 2011, because unemployment rate can rise to 9% and employment can reduce to 200 thousand jobs. According to CIPD estimates reduction in the public sector will amount to about 120 thousand jobs and about 80 thousand in the private sector. We would remind that British Government plans to reduce the number of staff in public sector by 330 thousand by 2015.

In general, at least first half of the year 2011 will be complicated for the British economy.

[More]