© Dukascopy Bank
"Everything is relative and given that we no longer live in a AAA world, any potential downgrade for the UK should have a negligible impact upon borrowing costs"
- Commerzbank (based on Reuters)
Industry outlook
Despite the recent bullish momentum of the pair, which managed to drag it above 1.5810 (200 day ma), the rally is unlikely to extend beyond 1.5992. The immediate support may be found at 1.5773, while subsequent levels are at 1.5730 and 1.5689.
Traders' sentiment
The Cable is oversold at the moment, since bears are in distinct majority (65%) and outnumber bulls, which compose 35% of the total amount of market participants.
Long position opened
Investors should pay attention to the identified with the help of the standard pivot point method resistance zones, as they might be useful during intraday trading. The initial resistance level is at the level of 1.5905, whereas R2 and R3 are situated at 1.5966 and 1.6072 accordingly.
Short position opened
In case of dips, another rally may start after rebounding from the initial support level at 1.5738. However, assuming that the bearish momentum does not weaken, investors will pay attention to the lower support levels at 1.5632 and 1.5571.
© Dukascopy Bank