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"The bias of the market is already short sterling and is already looking for the Bank of England to remain very dovish."
- Dominic Bunning, HSBC (based on Business Recorder)
Pair's Outlook
On Tuesday they Sterling managed to put the immediate resistance, namely the weekly PP, to the test, but trade still closed nearly 60 pips away from that level. The bullish momentum might once again push the Cable towards the nearest resistance or even higher if the fundamental data provides sufficient impetus, which could then result in a rally towards the second cluster around 1.4155. Technical studies, on the other hand, retain their bearish signals, implying that the overall four-week bias remains bearish. Consequently, a bearish development, if such occurs, is likely to be limited by the support area around 1.3740, represented by the Bollinger band and the weekly S1.
Traders' Sentiment
Although not as strong as yesterday, but market sentiment remains bullish at 60%, while the share of purchase order slid from 59 to 54%.
© Dukascopy Bank SA