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"The fall (in sterling) has run out of momentum around the psychological $1.60 level. If it does break below there the fall could gather momentum"
- Societe Generale (based on Reuters)
Pair's Outlook
The cable appears to have ended its short-term upward correction ahead of 1.6062/85 due to a lack of bullish momentum. Therefore the currency pair is expected to focus more on supports, the nearest of which is located at 1.5988/80. Subsequent levels may be found at 1.5911/1.5861, although only 1.5831/11 is anticipated to weaken bearish tendency significantly.
Traders' Sentiment
A majority of market participants (63%) with opened positions stay short on GBP/USD. On the other hand, 37% of them believe the Sterling is going to appreciate relatively to the U.S. Dollar. The ratio between buy and sell orders is 44% to 56%, respectively, and thus supports negative outlook.
© Dukascopy Bank SA