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"he UK's relative rate expectations might also have been pulled down a bit by Brexit fears. But even accounting for that, we think that cable would only rise from its current level of $1.45 to about $1.50."
- Capital Economics (based on PoundSterlingLive)
Pair's Outlook
The Cable underwent the expected correction on Thursday, as supply, represented by the 22-month down-trend and the Bollinger band, was sufficient to prevent the Sterling from appreciating. However, the exchange rate was unable to fall under the nearest support, namely the weekly R1, where demand could attempt to push the price higher again today. Meanwhile, technical studies are giving mixed signals in the daily timeframe, unable to provide a clear sense of direction. The base case scenario remains a decline, with the 1.46 level being the key level to limit the losses. Nonetheless, we should not rule out the possibility of a bullish development, as fundamentals could weaken the Buck today.
Traders' Sentiment
There are 57% of traders being long the Sterling today (previously 54%), while the share of sell orders inched up from 52 to 58%.
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