© Dukascopy Bank
"With other central banks like the Fed and the Bank of Japan still dovish, we could see support for sterling emerge at lower levels"
- Rabobank (based on Reuters)
Industry outlook
Persistence of the Cable at 1.6167 might bear fruit. Even though violation of the resistance is not favoured scenario, it will result in an increase of the price of up 1.6425. The initial support level is located at 1.6062, followed by 1.5984/92 and 1.5888.
Traders' sentiment
The share of traders keeping longs on GBP/USD has increased up to 30%, though it was insufficient to overthrow the prevailing bearish mood of investors.
Long position opened
The break of the short-term resistance line 1.6202 would pave the way for the pair to rise up to 1.6242. The clearance of the second daily resistance level would establish a new target for traders at 1.6303.
Short position opened
Major dealers are planning to partially close their short positions if the pair touches upon the first support level at 1.6101. However, if the bearish impetus proves to be strong enough, some of the positions could be squared off at S2 of 1.6040 and at S3 of 1.6000.
© Dukascopy Bank