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"With gilt yields near historic lows, the fact that the UK has control of its own central bank and monetary policy makes it a relative safe haven from events in Europe, on a fiscal level, if not an economic one"
- CMC (based on Reuters)
Pair's Outlook
Following a false bearish breakout of a downward sloping trendline at 1.5557, GBP/USD has recovered and is now about to retest a resistance zone at 1.5638/67. Subsequent level may be encountered at 1.5719/44, although given its toughness the currency couple is likely to consolidate near it before recommencing bullish advancement.
Traders' Sentiment
SWFX traders' sentiment index is mixed towards GBP/USD, as the amounts of bulls and bears are almost identical, being 51% and 49% of the market, respectively. On the other hand, the ratio between buy and sell orders is 62% to 38%, signifying growing conviction of traders the Cable is likely to show some weakness prior to a full-blown rally.
© Dukascopy Bank SA