GBP/USD to respect resistance at 1.61

The Cable keeps trading right beneath the four-month down-trend, meaning the downside risks are currently elevated. The base case scenario is GBP/USD confirming the resistance at 1.61 and thus terminating the upward correction from the 2013 Q4 low. The support at 1.5850 is therefore considered to be the most likely target. The negative bias is also suggested by the technical indicators, especially on the daily and weekly time-frames.

Most of the SWFX market participants believe the Sterling is going to outperform the Buck—as many as 61% of open positions are presently long. As for the commands, a majority (59%) is to sell the Pound against the Greenback.