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"On the one hand sterling is a safe haven for euro area capital flows so likely to do relatively better than other European currencies. But as it is still a European currency and so likely to weaken against the dollar and yen"
- Barclays Capital (based on Reuters)
Pair's Outlook
A rally above a support area 1.5535/21 was not sustained, resulting in a pullback and temporary suspension of further bullish activity. Slowdown in appreciation of the British Pound, however, is expected to be short-lived, even though there is a number of tough resistance that lie ahead - 1.5628/67, 1.5739/66 and 1.5852/92, which are likely to hamper northward movement of the Cable.
Traders' Sentiment
The difference between long and short positions has widened once more, as the portion of bulls has grown up to 61%, while the share of bears has fallen down to 39%, meaning increasing conviction of traders the Sterling is about to gain in value relative to the U.S. Dollar. Although on the other hand, only 40% of orders placed on GBP/USD are to buy GBP, as 60% of them are to sell it.
© Dukascopy Bank SA