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"While we expect it to trade mostly in a $1.59 to $1.61 range in the coming months, we do expect the pound to outperform the euro and look for a gradual move to 76 pence on a 12-month view."
- Rabobank (based on Reuters)
Pair's Outlook
The Sterling is currently negating Thursday's losses, as the currency gained bullish momentum due to a recent test of the dense demand area near 1.5850 (monthly S1, Oct minimum and 2013 Q4 low). But the rally is unlikely to extend more than 150 pips from today's open price, since there is a cluster of resistances around 1.60, created by the monthly PP, weekly R1 and, most importantly, by the four-month down-trend.
Traders' Sentiment
The distribution between the bullish and bearish market participants keeps levelling off. During the last five days the percentage of the long positions has decreased from 65 to 57%. At the same time, a substantial majority of the orders is to sell the Pound—76% of them.
© Dukascopy Bank SA