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"The UK's fiscal situation is also coming under increasing scrutiny and, as it does, we expect some of the ratings-haven flows into sterling to slow, or even reverse"
- Morgan Stanley (based on Reuters)
Pair's Outlook
Bulls do not wish to give in just yet, delaying formation of a down leg in the long run. The nearest supports for the cable to conquer lie at 1.6055 and 1.6004/1.5970, while selling pressure at 1.6085 and 1.6112/35 is expected to prevent emergence of rallies and reinforce bearish bias. Although judging by forecasts for the next quarters GBP/USD is unlikely to move down significantly, we suspect the price is well-positioned to aim for 1.5601/5585.
Traders' Sentiment
While the U.S. Dollar enjoys ubiquitous popularity in the SWFX marketplace, being bought in 61% of cases, most of traders (63%) anticipate further weakening of the British Pound relatively to the greenback. At the same time ratio between buy and sell orders placed on the pair is 46% to 54%, respectively.
© Dukascopy Bank SA