GBP: British Pound remains under pressure

At the Forex currency market the British Pound Sterling remains under pressure on Friday.

Forex forecast: MACD indicator for the pair GBP/USD continues to go down in the negative area, giving a sell signal; volumes are increasing. Stochastic Oscillator tends to go out of the oversold zone and started to shape a buy signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of break down at the level of 1.5800, the target for buying will be the levels of 1.5820 and 1.58401. If upward breakdown does not take place, the pair will aim to 1.5750.

It became known yesterday that retail sales in the UK fell by 0.2% m/m, in August, the index has not changed on annual basis. In addition, Mr. Cable said this morning that program QE will enable economy to regain both consumer and business confidence if they press ahead with a program in the same volumes.

The data released earlier was interesting: index of retail sales in the UK amounted to +0.6% m/m (+5.2% y/y), which agreed with expectations. In addition, consumer price index CPI rose by 0.6% m/m (+4.5% y/y) in August against the forecast of growth by 0.6% m/m. Inflation was fueled by the rising prices for textiles and clothes. Thus, inflationary pressure on the British economy still persists and is not going to retreat. The data released in the middle of the week showed that as per MOT estimates, unemployment rate in the UK remained at the previous level of 7.9% in July. In addition, the level of unemployed increased by 80 thousand for the reporting period. Official statistics demonstrates that unemployment rate in the UK remained at the level of 4.9% in August and level of unemployed increased by 20.3 thousand.

It seems that Great Britain will continue to reform the banking sector, with the main objective of protecting investors and consumers from the consequences of financial crisis.

Preliminary GDP in the UK increased by 0.2% on quarterly basis (+0.7% y/y) in Q2. The head of the Bank of England Mr. King noted this week commenting inflationary indices that, CPI can easily reach 5% and MPC can use interest rate or QE to control risks, if the need be.

It became known earlier that balance of house price RICS in the UK amounted to -23% in August which agreed with the forecast.