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"Sterling is more attractive than the euro and the yen, but it's not as competitive against the U.S. dollar, and as long as those [U.S.] rate hike expectations keep creeping up the greenback is going to thrive."
- Westpac (based on CNBC)
Pair's Outlook
GBP/USD is currently trying to accomplish what it was not able to do earlier this week—fill a massive hole that appeared after the weekend. However, a recovery beyond 1.63 is highly unlikely. The Pound is expected to turn around before hitting the monthly S2 and then resume the decline implied by the daily and weekly technicals. And once the support at 1.61 is out of the way, there will be no significant obstacles until the 2013 Q4 low at 1.5850.
Traders' Sentiment
Although the Sterling has recently increased in value, there is still a large number of traders considering it to be below its true value—65%. As for the orders, the difference between the buy and sell ones is presently insignificant—10 percentage points.
© Dukascopy Bank SA