GBP: British Pound Sterling continues to be sold out

At the Forex currency market the British Pound Sterling is still sold out on Wednesday, as external background does not provide a chance to regain at least part of the losses.

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 remains in the oversold zone and is giving a similar signal.

Forex recommendations: in case of break down at the level of 1.5710, the target for sale will become the levels of 1.5700 and 1.5680. If a downward breakdown does not take place, the pair will consolidate at the current levels.

Traders were not disinterested in the Pound statistics on Tuesday. 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.

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

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.

According to the data released earlier retail price index BRC in Great Britain increased by 0.1% m/m (+2.7% y/y) in August against the fall of 0.2% m/m a month earlier. However, annual gain amounted to 2.8% in July; obviously the CR continues to decrease. Expensive raw material puts pressure on consumer inflation, which is reflected in the indicator. According to Nielsen estimates about 40% of purchases were the goods involved in various promotions, which proves that the British do not want to spend money.

Visit of British Prime Minister Davis Cameron has not influenced on the position of the currency – it is more a political issue, although during the meeting with Russian authorities some commercial contracts have been signed.