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"We've had quite a reaction off the back of the election and, at least in terms of cable, we've had an overextension."
- Saxo Bank (based on Bloomberg)
Pair's Outlook
As anticipated, supply at 1.58 was enough to stop the Sterling on Friday. However, the question remains, whether the upward momentum is now fully exhausted, or the sell-off that is highly likely to follow will only be a correction before yet another rally. If we accept that the Cable is currently trading in a channel, there could be a decline down to 1.55 without the bullish outlook being compromised.
Traders' Sentiment
The market remains almost equally divided between the bulls (47%) and bears (53%). Meanwhile, the gap between the numbers of buy and sell orders contracted, from 18 to 12 percentage points in favour of the former.
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