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In comparison with EUR/USD the cable followed a clear trend and performed almost 200-pip rally. In addition to that, the pair continued moving upwards this week and almost reached a key resistance represented by a weekly R1 at 1.6715. Sluggish growth in the manufacturing sector, however, stopped pair's appreciation for some time and dragged it back to 1.6630.
Traders believe it can be a beginning of a new downtrend move, as they expect the pair to hit 1.6579 this Friday. This level is just slightly below the weekly pivot and daily S2. Furthermore, more than 60% of respondents are bearish on the pair, while almost 63% of opened positions are short. What is more important, is the fact a slight majority of pending orders is placed to sell the Sterling versus the greenback.
From the perspective of technical analysis, the pair is approaching the apex point of the ascending triangle pattern on a weekly chart, and despite bearish outlook and a recent throwback, the pair climbed above pattern's resistance once again. In addition to that, aggregate technical indicators on a weekly and monthly charts are sending "buy" signals. Therefore, the long-term outlook is still bullish.
Fundamental data can play the key role for the cable this week, as following disappointing manufacturing PMI, figures from the construction and services sectors can have even stronger impact on markets. "Data from U.K. seems to be encouraging, but advance upwards is quite difficult as the Pound is quite strong at the moment and if it will get even more stronger good data from economy could no longer be in place. Thus, I think it is time for some rate correction during coming week," said Rokasltu.
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