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"Even without the ‘Brexit' headwinds, pound-dollar would have traded lower this year based on this inflation divergence. Markets are looking for any reason to sell the pound, while there's limited buying appetite given the ‘Brexit' event risk."
- ING Groep NV (based on Bloomberg)
Pair's Outlook
Last Friday the GBP/USD currency pair managed to regain the bullish momentum and retake the 1.41 major level, also erasing Thursday's losses completely. The Cable still has room for a rally towards the 1.43 psychological level today, which is bolstered by a number of other important levels, namely the monthly PP, the weekly R1, the 20 and the 55-day SMAs. Nevertheless, there is another obstacle at 1.4151, represented by the weekly PP, which could also contribute to keeping the pair from appreciating. According to technical indicators, the Sterling is to continue declining versus the Buck, with the nearest support located just under the 1.40 mark.
Traders' Sentiment
Market sentiment remains strongly bullish, as 66% of all open positions are long. Meanwhile, 65% of all pending orders are to buy the Pound.
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