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"We should see some stabilization and perhaps some scope for sterling to move higher in the near term."
- Bank of America Merrill Lynch (based on Bloomberg)
Pair's Outlook
Though we expected more weakness for the Sterling, the currency rebounded from 1.50 because of the new speculations regarding the rate hike in the UK. There is a good chance the currency has not yet fully realised its near-term bullish potential, and GBP/USD may reach the monthly S3 at 1.5150 in the coming days. The key resistance is at 1.53, where the multi-month down-trend joins forces with the monthly S2 level.
Traders' Sentiment
The bulls remain in a majority, and the current percentage of long positions is at its 10-day average, namely at 57%. At the same time, there are less and less people willing to sell the Pound, the share of orders to sell the currency declined from 74 to 66%
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