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"While Carney highlighted the positives for the UK economy from low inflation we expect the sterling downtrend to remain in place. Sterling rebounds remain a sell, in our view, and we maintain our medium term target for a decline into the $1.40 area."
- Morgan Stanley (based on Reuters)
Pair's Outlook
Having gained a solid foothold above the monthly S3, the Sterling carried on with the bullish correction, winning more than 70 pips against the Dollar. Taking into account absence of resistances until 1.53, the rally may well extend further, but may be limited by the monthly S2 and weekly R1 levels. The key supply area is at 1.5450, the current location of the seven-month down-trend, and as long as it stays intact, the medium-term outlook will remain bearish.
Traders' Sentiment
The gap between the amounts of bullish and bearish market participants is no longer significant, only 10 percentage points in favour of the former. Concerning the orders, most of them (58%) are to sell the Pound against the buck.
© Dukascopy Bank SA