GBP: British Pound Sterling continues to go down

At the Forex currency market the British Pound Sterling rate continues to go down in the middle of the week amid the decrement of investors' interest in risk caused by the Irish problems. In addition, the UK block of news scheduled for this week also keeps investors on tenterhooks.

Forex forecast: MACD indicator is in the negative area for the pair GBP/USD and it goes down, confirming a previous sell signal for the pair. Stochastic Oscillator is giving an antipodal signal today, being in the oversold zone.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.5900 the pair will go to 1.5950 and 1.6000. If the level of 1.5840 is exceeded, traders' targets will become the levels of 1.5810 and 1.5780.

As Mervin King, the Bank Governor stated yesterday, the regulator continues to follow target inflationary level, assigned earlier, as long term forecasts clearly demonstrate that there is no point to fear sharp rise in prices.

We would remind that the Bank of England believes that the upper limit of the inflation range should be at the level of 3%. However the data released yesterday showed CPI growth by 3.2%. The UK Inflation in September was 3.1%.

According to King:"if inflation expectations rise above the target, then important measures in the monetary policy could be taken  to reduce expectations of the prices rise.

The situation in the sector continues to be ambiguous. Earlier the LSL/Acadametrics estimations showed that houses prices in England and Wales went up by 0.3% in October, the rise continues for sixth consecutive month, increasing by 6.1% on annual basis; analytics in the real estate sector contradict one another: Halifax stated that houses prices in October increased by 1.8%, Nationwide insisted that the indicator fell by 0.7%. It is a paradox, but a fact why would houses prices grow rapidly in the country with low level of consumer spending and high unemployment rate. Nationwide economists stressed earlier that if the trend, started in the early summer, will continue in November and December, the prices will have a chance to drop by 1% by the end of the year.

Rightmove specified that they noticed the oddity in indicators in October; however they assumed that traders deliberately start to overprice to hold the objects until better time.

 

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