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"Investors have been buying into the pound aggressively but there has been some fatigue over the past few weeks."
- Canadian Imperial Bank of Commerce (based on Bloomberg)
Pair's Outlook
After an almost non-stop descent from 1.72 GBP/USD has finally formed a noticeable green candle. If the Sterling continues developing this correction, the immediate obstacle at 1.6879 will be unlikely to stop the currency. However, the 100-day SMA at 1.6914 and even more so the resistance at 1.70 are capable of preventing further advancement. Once the rally is fully nullified, the 200-day SMA and May low at 1.67 should be the next destination.
Traders' Sentiment
A portion of the bullish traders seems to have already closed some positions after the yesterday's rally, being that the percentage of longs went down from 62 to 57%. The share of buy orders also contracted, but from 59 to 54%.
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