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"The Bank of England have given very clear indications that they want to lag the Fed."
- BMO Capital Markets (based on Bloomberg)
Pair's Outlook
Yesterday the Cable broke through the 61.8% Fibonacci retracement of the drop observed during the last week of August. This implies continuation of the current recovery. The immediate resistance is at 1.5674 (monthly R1), followed by 1.5818, the level where the late August sell-off began. Further to the north is the June high at 1.5930. However, during the next few days we may expect a correction, which is likely to be limited by 1.5527/04.
Traders' Sentiment
Although there are more longs (56%) than shorts (44%), the SWFX traders' sentiment borders on being neutral. Meanwhile, there is no longer a significant difference between the buy (53%) and sell orders (47%) after 20 percentage points recorded yesterday.
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