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"The thing that is dominating market sentiment is when Spain will apply for a bailout. And, until that happens, it is weighing on both the euro and sterling, but especially the euro"
- Credit Agricole (based on Reuters)
Pair's Outlook
After yesterday's fluctuation in a 1.6190/1.6240 channel, the setup in GBP/USD pair did not change, as price is locked in a very wide channel and is not able to brake through the 1.63 psychological level and a one-year high. However, situation is quite ambiguous, as rallies are unlikely to finish around these levels, but for a further increase RSI (D1) has value of 75. Therefore the cable is anticipated to rechallenge a previous high soon and make a spike up, which will be led by a downward correction.
Traders' Sentiment
SWFX market participants stay bearish, as 26.1% have long positions and 73.9% have short ones. Such a gap in distribution tempts to see price fall. Situation in pending orders market is more balanced, as 52.9% are willing to open long positions and 47.1% have placed orders for short.
© Dukascopy Bank SA