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- Mizuho Securities (based on Reuters)
Pair's Outlook
The fundamentals turned in Sterling's favour on Tuesday and along with the strong support cluster around 1.2850 caused a substantial rally in the Cable. Consequently, the Pound almost completely erased all previous week's losses, having closed just on top of the weekly R1. However, technical studies keep giving bearish signals, suggesting that a correction after such a surge is likely to take place. A decline then would cause the GBP/USD pair to fall back under 1.30. On the other hand, a lot depends on the FOMC Minutes today, where a dovish statement could spark more Pound-buying, with the ceiling seen as far as 1.3170, where the weekly R2 coincides with the monthly PP.
Traders' Sentiment
Bullish sentiment worsened over the day, as 58% of all open positions are now long. Meanwhile, the share of buy orders slid from 57 to 54%.
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