GBP: British Pound makes another attempt of correction

At the Forex currency market the British Pound Sterling makes another attempt of correction from lows.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD, but continues to decline, besides volumes are slowly going out, that may indicate reversal. Stochastic Oscillator is in the oversold zone, giving a pair sell signal.

Forex recommendations: in case of bullish movement strengthening buyers’ targets for today will be the levels of 1.6025 and 1.6040. If breakdown doesn’t occur, the pair will continue to consolidate near current levels.

Final 4q GDP data will be released in Great Britain today at 12.30 Moscow time. If the indicator is revised upward the news will be supportive for the British Pound.

Both fundamentals and the general external background continue to put pressure on the British Pound. The day before Spencer Dale of Bank of England said he would be ready to reverse his decision on the key interest rate in case the inflationary pressure in the country continued to ease. He voted to raise the key rate this month guided by the inflation indicators.

According to the Minutes of meeting of the Bank of England 6 members of MPC voted for keeping interest rate at the previous level. In addition, 8 people were for preserving current volume of the assets redemption program. Posen voted for the growth of QE by 50 billion pounds. Therefore, balance of forces in the Monetary Committee has remained unchanged, which frustrated bulls who expected indications of imbalance. Following the meeting of the Bank of England it became known that interest rate was kept at the previous level of 0.50% per annum, volume of debt securities was also left unchanged – 200 billion pound sterling.

Statistics released last week also made its contribution to Pound’s weakness. Firstly, released statistics were weak and disappointed investors: retail sales excluding fuel in Great Britain fell by 1.0% m/m (+1.2% y/y) in February, level of retail sales fell by 0.8% m/m (+1.3%) y/y against the forecast of reduction by 0.6% m/m.

Still medium trend for GBP/USD is bearish with the possibility of technical correction.

 

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