2012-02-15 10:28:00
The British Pound Sterling rate is traded upward at the Forex currency market on Wednesday in response to market optimism.

Forex forecast: MACD indicator for the pair GBP/USD has broken through the signal line from bottom to top and came into the positive area; it is moving along the signal line now and is not giving a clear signal. Stochastic Oscillator tends to go out of the oversold zone, to where it had slipped down yesterday, and is giving a buy signal today.

Forex recommendations: in case of breakdown at 1.5730, the pair GBP/USD will go to 1.5740 and 1.5750. Consolidation near current levels is possible.

The Pound is pushed up by market optimism based on the news that China is ready to help Europe, which outweighed negative news from Greece. The data released on Tuesday was quite good. CPI fell by 0.5% m/m (+3.6% y/y) in January against the level of +4.2% y/y in December.

Yesterday, rating agency Moody's announced that forecast for the UK rating was downgraded to "negative", however existing rating was left at the previous highest level of AAA. The Pound became agitated by this news: rating agencies used to stay away from Great Britain. However, it is becoming more evident now that even tough opposition to European problems will not be able to protect Britain from negative impact.

According to the data released last week, output volume in construction sector fell by 0.5% on quarterly basis (+0.9% y/y) in December against preliminary growth expectations of 0.2%. Authorities have already reacted to statistics and stated that the index is not the cause for revising GDP in the country. At the meeting last week the Bank of England increased asset repurchase program by 50 billion pounds, up to 325 billion pounds, as expected. Mr. Osborn stated commenting this decision that the increase of QE will help achieve inflation target (official target is 2% and it has not been changed for about two years.) According to Osborn, current monetary policy is still the primary instrument of influence on economic changes. Analysis of the Bank of England proved efficiency of QE.