Britain’s economy shrank more than forecast in Q4. Gross domestic product dropped 0.3% q/q. A decline of 0.1% was forecast for this quarter. Amid news the pound had dropped 65 points for 4 minutes. However, it had been back bought and by the close of the trading session the pound had grown by 10 points.
Speaking at the World economic Forum in Davos, Switzerland, incoming Bank of England governor Mark Carney has given the clearest signal yet he is willing to see higher inflation for longer to support economic growth.
From the technical point of view, the price did not manage to consolidate above the considerable level of Fibonacci 236% (1.5830) and is lower the trendline (the view is presented on H4). On the daily chart the price is under the trendlines and the level of Fibonacci 161.8%. On the H4 Merlin Oscillator crosses zero line from top downward. Continuation of down move towards the point of interjection of the level of Fibonacci 314% with 1.5714, bearish trendline on the H4, is expected. The first target is support on the daily chart 1.5725.
