GBP: Obscure trades for British Pound moved to outset

At the Forex currency market trades for the British Pound Sterling are not steady on Thursday, as it determines movement direction.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD, however it is sliding down, giving a pair sell signal. Stochastic Oscillator is giving an antipodal signal today, approaching overbought zone.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.6120 the pair will go to 1.6150 and 1.6180. If the level of 1.6080 is exceeded, traders’ targets will be the levels of 1.6050 and 1.6010.

According to the Bank of England, the risks of inflation are shifted upward at the moment and the forecast of economic growth appears weaker than in November. In addition, the risks associated with household expenditure are there as well; the recovery of the British economy is unlikely to be smooth and soft.  

The head of the Bank of England Mervyn King emphasized that he can see imbalance of economic system in the country and does not approve market’s expectations of the interest rate increase. He reiterated that the regulator has never reported on the increase of interest rates in advance.

We would remind that statistics released earlier showed that level of CPI in the UK increased by 0.1% m/m (+4.0% y/y) in January against the growth by 3.7% y/y in December.

As the study, made by CEBR, the Center of Economic and Business Research, indicates, the clouds continue to thicken over the British real estate market, which was especially evident last month. Thus, according to the estimates of the Center, houses prices will drop by 1.7% in the UK this year versus estimates of growth by 2.2%, made in November. It is worth noting that the forecast was lowered up to 2014, to 9.1% against 16% previously.    

Analytics of the Center believe that the rise in prices can start in 1012 gradually, with the easing of credit conditions in the country.

Statistics showed on Wednesday, that unemployment rate in Great Britain remained at the previous level of 7.9% in December and a number of unemployment benefits requests increased by 2.4 thousand in January against expectations of reduction by 4.1 thousand.

[More]