© Dukascopy Bank
"The [UK] CPI data has been negative for sterling as it increases the chances of QE at the margins"
- UBS (based on Reuters)
Pair's Outlook
GBP/USD has eroded a tough support at 1.5786 (200 day SMA) and is now well-placed to continue trading lower, given its strengthening bearish momentum. The nearest line in the sand should be found at 1.5654, while a deeper contraction, down to 1.5616 or even 1.5537/1.5497, is a viable perspective as well. Nonetheless, indicators remain mixed, suggesting the price is about to undergo a minor correction before showing distinct moves.
Traders' Sentiment
Stance of traders on GBP/USD remains largely unchanged, as bullish traders still form 46% of the market, whereas bearish ones compose 54% of it. At the same time merely 29% of market participants intend to acquire the Sterling within 100 pips from the current price, leading to a conclusion that 71% of them plan on buying the US Dollar against GBP, given the same range.
© Dukascopy Bank