GBP: the British Pound shows some correctional movement after another selloff

t the Forex currency market the British Pound Sterling rate shows some correctional movement on Friday morning after touching local lows the day before.

Forex forecast: MACD indicator for the pair GBP/USD is moving along the signal line in the negative area, not giving any signal. Stochastic Oscillator rises slightly in the neutral zone, giving a buy signal.

Forex recommendations: in case of breakup at the level of 1.5470, buyers’ targets will be the levels of 1.5480 and 1.5500. This variant is intact for the technical correction.

The Bank of England held a meeting the day before as an outcome of which it decided to keep the rate unchanged at the level of 0.50% as expected and to enlarge the QE-program to GBP275 bln from GBP200 bln

In his comments to the decision the Head of BoE Mervin King said that the QE-program enlarging was provoked by the world economy cooling and it would do good to the British economy later.

According to his speech, current measures are preventive as Great Britain is in the middle of a serious crisis at the present moment.

As a response to the BoE decision the British Pound showed more weakness and today is recouping its losses.

At the same time the housing sector goes away from hibernation: Hometrack House prices index in Great Britain declined by 0.1% m/m (-3.5% y/y) in September. The statistics released earlier showed that Nationwide house price index in Great Britain increased by 0.1% m/m (-0.3% y/y) in September. The previously released data indicated that house prices Rightmove increased by 0.7% m/m in September. Still some lack of demand and an upward pressure caused by extremely low interest rates can be noted that provoke a price increase. Plus to this low level of public confidence to economy and reluctance of people to spend money, caused by obscure economic prospects. As it became known today, BRC Retail prices index in Great Britain increased 0.2% m/m (+2.7% y/y) in September. According to the agency’s calculations, Food prices increased 0.1% m/m (+5.0% y/y) last month. As it became known earlier, Gfk Consumer Sentiment in Great Britain increased to the level of -30 points in September against the level of -31 points in August. However in spite of some positive dynamics, index is still near its historic lows and doesn’t drag to historical average. The indicator has moved away from its lows this year, but strong stabilization is still a long way off. It is worth noting that the indicator of the economic situation fell to -58 points for the last 12 months.

Still the British Pound remains under strong external pressure.