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"These numbers [UK public sector borrowing] have helped the pound against the dollar as has the speculation that Spain will soon seek a bailout"
- Caxton FX (based on Reuters)
Pair's Outlook
The cable is desperately trying to overcome a major downtrend resistance, but is capped by 1.6233 in conjunction with 1.6300/04. Accordingly, rallies are unlikely to extend beyond these levels, even though GBP/USD may rechallenge them shortly. Still, the long-term outlook is bearish, being that the pair has already reached the upper limit of a downtrend channel it has been trading within for nearly two years.
Traders' Sentiment
Market participants have become even more bearish towards GBP/USD, as the share of bulls has diminished to 26%, while at the same time bears develop their dominance and constitute 74% of the market. The ratio between buy and sell orders is 57% to 43%, respectively.
© Dukascopy Bank SA