GBP/USD is at key support

GBP/USD has fallen through the weekly PP and 2011 highs in order to once again test firmness of the up-trend support line at 1.6477/21. In case this demand area is violated, we would not expect the monthly S1 and the 100-day SMA to be able to stop the ensuing sell-off. The 200-day SMA at 1.59 will then be a more realistic potential reversal point.

The majority of the SWFX market participants doubt the ability of the Sterling to appreciate relative to the U.S. Dollar—64% of the open positions are presently short. As for the orders placed 100 pips from the spot, 56% of them are to buy and 44% are to sell the Pound against the greenback.