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"Sterling appears overvalued versus the dollar (and) the soft dataflow, in addition to the upcoming political risk, suggests that there is scope for another period of sterling undershooting."
- BNP Paribas (based on Business Recorder)
Pair's Outlook
The Cable remained relatively unchanged against the US Dollar on Wednesday, having edged only seven pips higher. As a result, the target level was not retaken, leaving that opportunity for Thursday. The GBP/USD pair today opened between the 20-day SMA from the upside and the monthly PP from the downside, but either one of those levels risk being pierced today, as they failed to contain the Sterling's movements since the beginning of the week. Technical indicators are also unable to provide any clear sense of direction, but the monthly ones remain tilted to the upside, suggesting that the 1.45 mark could be reconquered after today's BoE rate decision.
Traders' Sentiment
Today 60% of traders hold long positions, compared to 55% yesterday. Meanwhile, the share of buy orders declined from 54 to 44%.
© Dukascopy Bank SA