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The same as the EUR/USD pair, the cable posted solid gains last week, appreciating 255 pips over the period. After peaking at 1.6821– the highest since February 17, the pair began moving downwards. This week will be full of important economic data from both sides, meaning the pair will be highly volatile in the coming days. On Tuesday the pair penetrated weekly pivot at 1.6705, breaking through the important psychological level.
A slight majority of respondents claim the pair will depreciate over the period, while the pair is expected to finish the week at 1.6700, just 16 pips lower from the last week's average price. However, keeping in mind the fact the pair was already trading lower at the moment of writing, bears can try to break daily S2 and S3 at 1.6675 and 1.6654, respectively. Moreover, market sentiment is strongly bearish (58%), while attitude towards the Sterling is bearish as well, with the currency being sold in 56% of all case across the board. In contrast, investors are buying the Dollar in 65% of the time.
While traders believe in the bearish scenario, fundamentals and aggregate technical indicators are pointing at pairs further appreciation. Indicators on a daily and monthly charts are sending 'buy' signals. Regarding the fundamental analysis, strong employment figures from the U.K. on Wednesday will reinforce speculations that the Bank of England will start raising rates sooner-than-expected, meaning the Sterling will receive a strong bullish bias. "We are getting towards the weekly drop-base-drop supply level since October 2008,the next week might be bullish gathering long orders for the institutions to sell against once we reach their key levels," said Lupyyyyy. Therefore, we should not exclude bullish scenario as well, and keep in mind the potential retest of the recent high at 1.6821.
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