© Dukascopy Bank
"We think sterling can strengthen further because stopping QE effectively stops devaluing the pound"
- Bank of America Merrill Lynch (based on Reuters)
Industry outlook
Even though the Cable bounced off 1.5848/40 (55 and 200 day ma) and is now headed towards 1.6062/67, there is little chance for the latter level to be breached. Additional support is provided by 1.5805 and 1.5780.
Traders' sentiment
The portion of market participants who stay long on GBP/USD has diminished to 28%. Accordingly, the part of those, who preferred to acquire the US Dollar against the British Pound has increased up to 72%.
Long position opened
While trading this pair, investors should pay attention to the immediate resistance level at 1.6077. If the pair manages to go through this level, further resistances are situated at 1.6133 and 1.6225.
Short position opened
In case of dips, another rally may start after rebounding from the initial support level at 1.5929. However, assuming that the bearish momentum does not weaken, investors will pay attention to the lower support levels at 1.5837 and 1.5781.
© Dukascopy Bank