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"The feeling is that the pound is not so fashionable any more. The Inflation Report underpinned what seems to be a growing line of UK negative data"
- Investec (based on Reuters)
Pair's Outlook
Movements of the cable are becoming less pronounced near a formidable support area that stretches from 1.5624 to 1.5600. However, a robust rally has a decreased probability of appearing and should be stopped by 1.5731/73. Accordingly, we expect the pair to slide back to 1.5276/33 before commencing long-term recovery and overcoming a confluence of 100 and 200 day SMAs.
Traders' Sentiment
The gap between the numbers of bulls and bears has narrowed, but the general sentiment is still bearish, being that the share of short positions is 56%, while long positions form 44% of the market. The ratio between buy and sell orders is 48% to 52%, respectively, and confirms market expectation of weaker GBP.
© Dukascopy Bank SA