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"The sharp risk-off environment has been playing a heightened role in the latest bout of sterling weakness. The UK's large current account deficit means that sterling is one of the most vulnerable major currencies to any deterioration in risk sentiment."
- ING (based on Reuters)
Pair's Outlook
The Sterling dropped to a fresh five-year low against the Buck on Tuesday, amid disappointment in the Manufacturing Production figures. However, the Cable managed to partially recover from the intraday losses, now facing a rather strong demand around 1.44, represented by the Monthly S2, the weekly S1 and the Bollinger band. This cluster is the last solid obstacle, preventing the GBP/USD from falling to 1.4230, namely the 2010 low. From the technical point of view, the Pound should end the day in the green zone, with a chance to negate Tuesday's losses completely.
Traders' Sentiment
Bullish market sentiment returned to last Wednesday's level of 62%, whereas the number of purchase orders remains unchanged at 43%.
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