GBP/USD poised to extend the rally

Source: Dukascopy Bank SA
© Dukascopy Bank SA
"With odds of a September Fed hike at just 32%, the market seems to be betting that concerns over the Chinese economy and the associated financial market volatility will be enough to stay the Fed's hand, although there are sound domestic grounds for the Fed to start hiking."
- ANZ (based on WBP Online)

Pair's Outlook

The Cable managed to recover on  Monday, erasing Friday's losses and stabilising just above the weekly pivot point. After being oversold, the British Pound appears to have begun recovering. With the continuation of the rally, the Sterling should pierce the 200-day SMA, thus, returning from the July's low and edging closer to a tough resistance cluster around 1.55 before the MPC votes on Thursday. However, a breach of the weekly PP might trigger further losses all the way down to the May low just under 1.51, as technical studies are giving distinctly bearish signals.

Traders' Sentiment

Traders' sentiment remains bullish, but at 52% (previously 58%). Meanwhile, the share of purchase orders declined from 54 to 44%.

© Dukascopy Bank SA

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