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"We think there has been a breakdown in the market sentiment in that the BoE's MPC will "follow" the FOMC, leading short-term interest rate spreads to move significantly in favor of the USD vs. the GBP."
- RBS (based on FXStreet)
Pair's Outlook
Weak UK fundamentals triggered another GBP/USD sell-off yesterday, with the pair dropping towards the immediate support at 1.4960. Nonetheless, trade closed above the 1.50 major level, but technical indicators retain their bearish signals, suggesting another decline is possible. The weekly S1 and the Bollinger band around 1.4950 are to limit the dips, whereas the weekly PP keeps providing immediate resistance. None of these levels are expected to be broken today, with a chance of the Cable remaining flat, amid lack of market movers.
Traders' Sentiment
Less traders retain a positive outlook towards the Pound, namely 58%. Meanwhile, the share of purchase orders slid from 74 to 42%.
© Dukascopy Bank SA