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    FTSE100: Upward correction can continue on 25.02.2016

    Despite rapid decline in the pound amid expectations of the outcome of referendum on the membership of the UK in EU (over 800 points since the beginning of the year and by 500 points over the last week), index FTSE100 is maintaining high positions in London exchange. It seems that efforts of the British prime-minister David Cameron to continue UK’s membership in the European Union are brining results. The EU leaders are for keeping Great Britain in the Union.
    Meanwhile it is likely that the UK will remain in EU. Many economists estimate probability of the UK exit from EU as 1 to 3.
    The British Pound started to decline since the beginning of the week when the Mayor of London Boris Jonson said that he would vote for the exit of the country from EU.
    The pair GBP/USD is near four-year lows. Consolidation of the price below the level of 1.4000, (from which the Pound has rebounded within the past 30 years) will create risks of further decline to 30-year lows near the level of 1.3700. Deutsche Bank believes that the pair GBP/USD can fall to 1.1500 at the end of the year.
    After yesterday’s decline caused by poor on retail sales for February provided by CBI report, today, the pair GBP/USD consolidated neat the level of 1.3925. The index FTSE100 is growing after breaking down resistance level of 5960.0.
    UK GDP for Q4 has not been revised ( 0.5% и 1.9% per year). The same data was provided in the previous quarterly report.
    The decline in the Pound increases competitiveness of the products manufactured in the UK and supports manufacturers in the country.
    Although GDP growth is slow, it provides support to the UK stock markets.
    Moreover, the deputy manager of the Bank of England Minosh Shafik warned the Parliament monetary policy toughening can take place earlier than investors expected. It proves that economic situation in the UK is slowly improving.
    It is possible that upward correction the index FTSE100 will continue until 17 March when the Bank of England will make new monetary policy decisions. The index can reach the level of 6160.0.


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