© Dukascopy Bank
"Our view on cable is that it will turn around only when the U.S. starts to outperform and the market believes in the U.S. recovery. We expect U.S. yields to back up relative to UK yields and that will bring cable lower"
- Barclays Capital (based on Reuters)
Industry outlook
The Cable is presently undergoing a bearish correction, which should terminate ahead of 1.6050 or 1.5954. Afterwards the pair is expected to recover and aim for 1.6425, following antecedent penetration of 1.6336.
Traders' sentiment
Even though the gap between bears and bulls has narrowed, short positions continue to outnumber the longs ones, as their ratio is 65% to 35%.
Long position opened
The initial resistance level for intraday trading is 1.6190. Bulls might establish additional targets at 1.6227 and 1.6251 if the Sterling appreciates more.
Short position opened
A part of the brokers will close their short positions near initial support level at 1.6129. In case of downtrend continuation, the pair might rebound from the S2 at 1.6105 or S3 at 1.6068.
© Dukascopy Bank