GBP: British Pound Sterling can find itself under pressure again

At the Forex currency market the British Pound Sterling rate is still in the positive area today, however the volume of sales at the trading floors is not large and technical factors indicate the possibility of the Pound decline.

Forex forecast: MACD indicator is in the negative area for the pair GBP/USD and it continues to fall, confirming a previous sell signal for the pair. Stochastic Oscillator is giving a similar signal today, being in the oversold area.

Forex recommendations: if bearish sentiments for the pair GBP/USD intensifies and in case of breakdown at the level of 1.5740 the pair will go to 1.5680 and 1.5650.

Speaking yesterday, a member of the Monetary Committee of the Bank of England Mr. Sentence stressed that preservation of the interest rate at the low level for a long time will undermine economy and weakens it.  At the same time fiscal discipline of the banks also becomes weaker. Sentence supports the rate increase and he is convinced that the country’s economy will withstand such step of the monetary authorities. As a solid argument the politician offered the value of inflationary levels which will remain above the target level of the regulator for the next two years, if the rate is not increased.  

It became known earlier that a number of approved mortgage requests in the UK declined to 30.8000 in October against the previous figure of 31.100. It has become one more indication that real estate market in the country is running down.

The UK block of news, released in the middle of the week included in particular the following: index of the UK service sector which increased by 0.6% in September against the growth by 0.2% in August. The level of GDP in the UK remained unchanged in QIII, demonstrating the rise by 0.8% (+2.8% y/y)

Opinion of Sentence contradicts to the view of the representative of the Bank of England Mr. Posen, who noted earlier that he has not changed his opinion regarding the necessity of monetary policy easing in Great Britain. He stressed that his growth forecast in the country is well below forecasts of other members of MPC, as reduction of budget expenditures will inevitably cause reduction in the household consumption. According to him, instruments, which are available to the regulator, cannot always be fully effective in combating the bubbles –Posen is convinced that inflation of the stock market bubbles would be very difficult to track.

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