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"The ongoing expansion of the BoE's balance sheet through its asset purchase programme continues to undermine the pound"
- Bank of Tokyo Mitsubishi (based on Reuters)
Industry outlook
Bullish momentum of the Cable is weakening while the currency pair is closing in to 55 day ma at 1.5606/81. Test of this resistance is expected to trigger a sell off down to 1.5272 with perspectives of reaching 1.4260/29 in the longer period.
Traders' sentiment
GBP/USD currency pair is oversold, since the amount of bullish positions is outnumbered to a large extend. Only 33% of trades are currently long, whereas the majority (67%) is formed by short ones.
Long position opened
The initial resistance level for intraday trading is 1.5514. Bulls might establish additional targets at 1.5542 and 1.5591 if the Sterling appreciates even more.
Short position opened
Major market participants with short positions will hold their deals until the price slides down to the initial support level at 1.5437. If the price continues the downtrend, the dealers might wait for the price to depreciate down to 1.5388 or 1.5360.
© Dukascopy Bank