GBP: British Pound Sterling is undetermined at the beginning of the week

At the Forex currency market the British Pound Sterling is close to the opening level on Monday amid stable external background.

Forex forecast: MACD indicator is in the negative area for the pair and it is moving along signal line, not forming a clear signal. Stochastic Oscillator has come into the oversold zone and is not giving a clear signal either.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.5530 the pair will go to 1.5580 and further to 1.5640. if the level of 1.5450 is exceeded, traders’ target will be the levels of 1.5410 and 1.5360.

The Bank of England is not yet able to keep clear of the European issues – earlier the regulator has repeatedly expressed the intention to help and on Friday he signed an agreement with the ECB about creating a temporary swop-lines to support Ireland; as a part of this document the Bank of England can offer its European counterpart about 10 billion pounds which would be a safety component of the ECB program.

As it is noted in the studies conducted by Markit company, sentiments of the British consumers have become less pessimistic; thus, current financial situation does not seem fatal to buyers; nevertheless no one has changed gloomy forecasts. Conclusions are made on the basis of the index of financial state of households, where the balance of households that are satisfied with their financial state has increased to the level of 39.9 against 38.9 in November. Although the indicator is located bellow the borderline level of 50 points.  

Inflation in the UK increased by 0.4% (+3.3% y/y) in November against the growth by 3.2% y/y in October. The fact, that the rate has been growing for the ninth consecutive month made economists worried. It is possible that the Bank of England will have to raise interest rate earlier to demonstrate that the inflation is under control. Interest rate is at the level of 0.50% per annum currently, the decision to leave it unchanged was made a week ago.
We would remind that the UK unemployment rate in QIII increased to 7.9% against the previous level of 7.8% and the forecast of 7.7%. Number of unemployed reduced in Great Britain only by 1.2 thousand in November against expected reduction by 3 thousand. 

 

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