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"We could see some weakness in the pound against the dollar as a knee-jerk reaction if fiscal tightening goes ahead."
- trader at a European bank (based on Business Recorder)
Pair's Outlook
Although the Sterling appreciated against the US Dollar yesterday, gains were limited by the monthly PP around 1.56. The Pound is still likely to outperform the Greenback today, in spite of mixed technical indicators, as it closed just above a strong support. The weekly PP, however, now acts as an immediate resistance, but we should see a surge towards 1.57, where the 20-day SMA rests, unless the fundamental data disappoints.
Traders' Sentiment
Market sentiment keeps improving, as bulls continue gaining ground; their share of longs now takes up 60% of the market. Meanwhile, the portion of orders to acquire the Cable declined from 56 to 51%.
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