GBP mid term depreciation against USD

Over the past four weeks the Great British Pound rate depreciated more than 4 percent. During the last one year, the GBPUSD advanced around 7 percent. Last week of Friday the Bank of England said that the UK could still going into a recession. After this the Pound fell rapidly against the USD.The British consumer price index came up by 2.9 percent in the year to March from 3.1 percent in the year to February .March rates was lowest since last year.


The report of UK retail sales fell from 23 to 13 in March; it was forecasted at 18. Existing Home Sales in US were down from 5.05 million to 5.02 million, the lowest level in eight months. After releasing the annual budget which was presented to Parliament, the sterling sharply corrected. A steady drop in unemployment figures has been seen since they touched 496K about a month ago. The unemployment claims drop from 452K to 442K.It indicates the sign of recovering the US economy.

Friday was the second day of a two day EU economic summit in Brussels. In this summit the European Central Bank President Jean-Claude Trichet said that without considering the European Union, the International Monetary Fund should not take the responsibility of supporting weaker Euro Region nations. He also mentioned in his comment that IMF bailout would be very bad.

Currently, the GBPUSD remains to its support at $1.4777 because it touched the same level in February and if it breaks then next support is at 1.4350. The resistance stays at $1.5409. If it is crossed then the market will turn to bullish phase.