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"We will prefer to play sterling/dollar for the downside. The fiscal and monetary fundamentals suggest the pound will stay under pressure even if there is an economic recovery"
- UBS (based on Reuters)
Pair's Outlook
As was suspected, GBP/USD initiated a bullish correction, but is deemed to possess a lack of upward momentum in order to surge up to 1.6212 and then violate it. The nearest resistance that is likely to halt the current rally is located at 1.6062/85, while extension of the move could result in an encounter with 1.6139/43. In the meantime, dips are to be contained by 1.5988/74.
Traders' Sentiment
Appetite for short selling does not increase, but persists in the market, as 62% of opened positions are bearish. Accordingly, the rest 38% of market participants believe the British Pound has potential to gain value. The ratio between buy and sell orders is 46% to 54%, respectively.
© Dukascopy Bank SA