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"Carney will pursue forward guidance, which is a method of telling markets that rates will remain low for long. We are expecting the pound to drop to $1.43 by year-end as the U.S. economy is expected to do much better."
- Societe Generale (based on Bloomberg)
Pair's Outlook
At the end of the last week it seemed that the pair might depreciate all the way till 1.50 with ease. However. Start of the week proved that Fibonacci levels (January to march, 2013, move) are still playing a significant role. At the moment pair is being supported by the Fibo 23.6% retracement. Pair outlook, however, remains negative with 1.5007 being the medium term target. Short term rallies, which seem likely due to the recent developments and the short term Stochastic indicator, should remain below 1.53.
Traders' Sentiment
Traders are becoming even more bullish towards the pound. In the last 4 trading sessions the share of bulls in the market increased by 14%. At the moment they account or 62% of market participants. Majority (58%) of pending orders are set in favour for the bulls as well.
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