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"It is very rational that the one-week implied vols are elevated as international investors are waking up to all the issues and the implications from the vote."
- CIBC World Markets (based on Reuters)
Pair's Outlook
The Cable has finally reached 1.6250, after encountering a dense demand area at 1.61. Ideally, this resistance should prevent further appreciation of the Sterling, which in turn is expected to start negating the recent gains, as suggested by the near-term technical indicators. This implies a re-test and a subsequent breach of monthly S3. GBP/USD will then be in a good position to visit 1.5850—2013 Q4 low.
Traders' Sentiment
Though the percentage of the bulls has somewhat declined, there are still more proponents of a rally—62% of the market. As for the commands set, there is presently no difference between the amounts of buy (46%) and sell (54%) ones.
© Dukascopy Bank SA