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"The magnitude of the dollar's reaction signals that investors were waiting for a reason to sell dollars."
- BK Asset Management (based on Business Recorder)
Pair's Outlook
The British Pound managed to recover from its intraday low yesterday, amid a dovish Fed statement. As a result, the monthly PP was once again confirmed as a strong support, as it pushed the Cable to close 40 pips under the 1.43 target. Technical indicators retain their bullish signals today, suggesting that another rally is likely to take place, this time pushing the GBP/USD currency pair above 1.43. The weekly PP and the 55-day SMA form a rather strong resistance cluster around 1.4320, which could provide sufficient supply to limit the gains. In case bears prevail, the monthly PP at 1.4141 is still the bottom floor.
Traders' Sentiment
Although not as strong as yesterday, but SWFX market sentiment remains bullish at 60% (previously 65%). The share of purchase orders edged 11% points lower, they now take up 45% of the market.
© Dukascopy Bank SA