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"The political risk premium for sterling seems to be rising and with UK data weakening, sterling is set to break lower. Sterling/dollar is a sell near $1.61 with a near term target of $1.57."
- Morgan Stanley (based on Reuters)
Pair's Outlook
Although GBP/USD was expected to head towards 1.5850 without any delays, the support at 1.60 stopped the advancement and sent the pair back to the down-trend at 1.61. However, now the Sterling has to face strong selling pressure that in turn is believed to be enough to prevent extension of the rally and resume the decline. The bearish outlook is reinforced by the technical studies, especially on the weekly time-frame.
Traders' Sentiment
The sentiment towards the British Pound is unchanged. Most of the traders, namely 64% of them, reckon the UK currency is likely to outperform the Buck. Meanwhile, it is worth noticing that most of the orders are placed to sell it against the Dollar– 65%.
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