© Dukascopy Bank SA
"The focus on inflation, or rather the lack of it shifts back to the UK and the US today and it is this lack of inflation that could well prompt a change of expectation on the part of the US Federal Reserve in the context of a possible rise in rates next month."
- CMC Markets (based on WBP Online)
Pair's Outlook
On Monday, the Cable tested the immediate support, but stabilised in front of the 1.52 major level, as was anticipated. Technical studies and the 20-day SMA crossing the 55-day one to the downside are both indicating a possible decline to take place today. As a result, the immediate support cluster risks getting pierced, with the second solid target to limit the dips located only at 1.5096, the weekly S1. However, the UK and US fundamentals could still turn in favour of the Sterling, causing the currency pair to extend its post-NFP recovery, thus, edging closer to the 20-day SMA around 1.5275.
Traders' Sentiment
Both shares of short positions and orders to sell the Pound returned to their Friday's levels of 60% and 59%, respectively.
© Dukascopy Bank SA