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"While we maintain our positive view on sterling in the medium term, any sign of a slowdown will probably add to downward pressure on the currency in the near term."
- UniCredit SpA (based on Bloomberg)
Pair's Outlook
So far this week the bears have been unsuccessful in breaching the monthly PP, but the ‘sell' signals provided by the indicators convince us this is going to happen eventually. In such a case the next major support to test the bearish momentum of the Cable will be the September low at 1.51. In the meantime, the immediate resistance is relatively close to the spot—the 200-day SMA is at 1.5330, leaving very little room for intraday rallies. If broken, additional resistance will be at 1.5390, represented by the 55-day SMA.
Traders' Sentiment
The sentiment in the market improved, but remains neutral—55% of positions are long (53% yesterday). At the same time, the share of buy orders surged from 50 to 61%, implying growing demand.
© Dukascopy Bank SA