© Dukascopy Bank
"Declining inflation is typically good for a currency and so this will prove for the pound"
- Commerzbank (based on Reuters)
Industry outlook
Resistance at 1.5934 (200 ma) has repelled GBP/USD which is now expected to slowly slide down to 1.5730 first and then down to 1.5660. The bullish impetus has faded and rallies are unlikely to extend above 1.6167/71.
Traders' sentiment
Traders who stay long on the Cable are still in a distinct minority, being 24% of the total amount of market participants. On the other side, bears continue to dominate, as they form 76% of the market.
Long position opened
The initial resistance level for the pair is 1.5870. If the price continues increasing, the investors will hold longs until the pair climbs up to 1.5923 or 1.5962.
Short position opened
A part of the brokers will close their short positions near the initial support level at 1.5778. In case GBP/USD continues falling, the pair might rebound from the S2 at 1.5739 or S3 at 1.5686.
© Dukascopy Bank