GBP/USD held by 1.6390

The resistance at 1.6390 (Jan high) continues to prevent continuation of a rally in GBP/USD for now, but at the same time does not initiate a strong sell-off to change its direction. The currency pair is expected to keep on eating off this obstacle until it gives in, which in turn will pave the way through 1.6554/50 en route to 2011 high at 1.6745/15

Although overall the popularity of the Sterling is picking up—the portion of longs in its crosses increased from 28% up to 35%, the sentiment of the market participants towards GBP/USD remains heavily bearish, as a substantial majority of traders, namely 73% of them, are short on the pair.