Community Forecasts for May 12-16: GBP/USD 1W Chart

Source: Dukascopy Bank SA
© Dukascopy Bank SA
The cable has been highly volatile over the last week, first soaring to 1.70 level on the back of strong services PMI and then easing to 1.6832 on Friday, as the U.S. Dollar gained across the board and dragged the Sterling off its four-and-a-half year high. So far this week the pair has stabilized around 1.6850, with long traders focusing on a recent high and weekly PP at 1.6896, while short traders will try to push the pair to the last week's lowest level. The pair can be even more volatile over the next several days, keeping in mind an abundance of important fundamental events from both the U.K. and the world's largest economy.

A slight majority of Dukascopy Community members are bullish on the pair, with 56.2% of votes speaking in favour of pair's appreciation. The pair is likely to reach 1.6877 by this Friday, still lower than the last week's average price of 1.6922. Interesting, that respondents are usually most successful in predicting the performance of GPB/USD, as 43.75% of votes were correct last week. More than 64% of all opened positions are short, while a slight majority of all pending orders are placed to sell the Sterling versus the buck. Aggregate technical indicators are bullish as well, supporting the scenario claimed by the Community members.

Everything will depend on this week's Inflation Report from the Bank of England on Wednesday, as it will be a perfect time to provide hints about the date of the first rate hike. Furthermore, unemployment figures from the U.K. are likely to surprise markets to the upside. In the meantime, traders believe consumer sentiment and inflation report from the U.S. will push the Dollar higher. The overall outlook is bullish, and a move to 1.6877 can be expected, with events from the U.K. providing additional support for the pair. Meanwhile, everything will depend on statistics from the United States.
© Dukascopy Bank SA

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