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"What we have, clearly, is an awful lot of disinflationary pressures ... and it means the Bank will be in no rush to raise interest rates. Is the UK close to a deflationary spiral? I think it's probably too early to be extremely worried."
- Jane Foley, Rabobank (based on Reuters)
Pair's Outlook
The monthly S3 at 1.5145 continues to underpin the Cable that in turn keeps trading sideways. Still, the bearish risks prevail, and a sell-off from the down-trend at 1.56 is likely to extend through the immediate support. This should lead to a re-test of the demand at 1.50 (weekly S1), followed by a decline down to 1.48, namely the 2013 low. In the meantime, the nearest significant resistance is standing at 1.5315, formed by the weekly R1 and monthly S2.
Traders' Sentiment
As noted yesterday, the Sterling becomes less and less popular. During the last five days the percentage of long positions has gradually fallen from 63 to 56%. Meanwhile, the gap between the buy (45%) and sell (55%) orders remains insignificant.
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