© Dukascopy Bank SA
"While some of the GBP strengthening is justified by the strong data and an increase in short-dated UK interest rates, our short-term financial models suggest the GBP rally is beginning to look overdone."
- Danske Bank (based on FXStreet)
Pair's Outlook
Although the Sterling was outperforming the US Dollar through most of the previous week, on Friday approximately a half of intraweek gains were erased, with the pair falling more than 100 pips and stabilising in front of the 1.45 mark. The Cable remains supported by the 20-day SMA, which is now also bolstered by the weekly PP right on top of the 1.45 major level. Even though a drop below this area is unlikely, a possibility still exists, as technical indicators are giving mixed signals. Meanwhile, the closest resistance area is located only around 1.4690, but there is no impetus present for a rally that high.
Traders' Sentiment
There are now 54% of traders being short the Pound, compared to 59% last Friday. At the same time, the portion of buy orders dropped significantly lower, namely from 61 to 49%.
© Dukascopy Bank SA