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"Owing to Greek uncertainty and higher volatility in the European bond market, going forward strong portfolio flows into the UK from the euro area are likely to continue, supporting GBP even if we don't have a near-term catalyst for bringing forward BoE rate pricing expectations further."
- Nomura (based on FX Street)
Pair's Outlook
The Cable experienced substantial volatility last Friday, reaching both the support and resistance targets. Nevertheless, the trading day still ended with the Sterling edging slightly lower, but stabilising in front of the monthly PP at 1.56. Technical studies are now suggesting the GBP/USD is to decline, but the 1.56 level is now also bolstered by the weekly PP and 20-day SMA, which altogether should cause a rebound. However, gains are unlikely to outstrip 25 pips.
Traders' Sentiment
Although slightly weaker, but traders' sentiment remains bullish at 52% (previously 54%). Meanwhile, the share of orders to acquire the Pound edged up from 51 to 56%.
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