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"We still prefer shorts in sterling against the dollar to shorts in the euro."
- Societe Generale (based on Reuters)
Pair's Outlook
As the demand at 1.5150 (weekly S2 and monthly S3) did not succeed at stopping the sell-off, the Sterling is likely to lose even more value in the coming weeks. The closest support is at 1.4931, represented by the weekly S3, and it is not expected to change the current downward direction of GBP/USD. On the other hand, the 2013 low at 1.48 has the potential to prevent or at least delay further depreciation of the Pound.
Traders' Sentiment
Previously the traders seemed to be taking advantage of the cheapening Sterling, now continuous depreciation of the currency is discouraging the bulls to enter the market—their share fell from 63 back to 60%. The share of sell orders declined from 62 to 58%.
© Dukascopy Bank SA