British fundamental data encourages the rise in the Pound. Unemployment rate fell to 7.6% indicating recovery of the British economy. According to the head of the Bank of England Mark Carney, the bank is not planning to raise interest rate in the near future, since the target level of unemployment rate of 7% has not been reached yet.
Meanwhile experts fear that another bubble is brewing in the British real estate market. Growth of the industry is directly linked with the scheme of public funding in which government acts as a guarantor for mortgage insurance. If payments on mortgage loans will be suspended, the government and the entire financial system of the country will be at risk of default.
Support and resistance
The Pound continues to strengthen against the American currency. The first obstacle for the British currency is the upper limit of the channel (1.6070). If this level is broken down the pair can grow up to 1.6200. Yesterday the pair GBP/USD consolidated above the moving average with period 50, which is a signal of further growth. The pair is supported by psychological level of 1.6000.
It is recommended to open long positions after breakdown of the level of 1.6070 with the target of 1.6200 and stop losses near 1.6045.
Analysts of LiteForex Group of Companies