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"We've had some strong [U.K.] numbers in the past week and there is further evidence the housing market is still strong."
- RBS (based on Reuters)
Pair's Outlook
Similarly to the Euro, the Sterling also moved north, but the currency is already facing one of the key resistances—13-month down-trend, which is currently reinforced by the monthly PP. If this level does not withstand the buying pressure, the 2009 highs at 1.70 could be the next target. Still, the base case scenario is long-term depreciation of the British Pound relative to the U.S. Dollar, though for the time being the 100-day SMA remains strong.
Traders' Sentiment
Because of an increase in price the share of bearish market participants grew from 52% to 59%, meaning the SWFX traders are largely unconvinced regarding the ability of the Cable to sustain a recovery.
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