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"Higher Treasuries yields and lower gold prices are consistent with U.S. dollar strength as investors anticipate U.S. rates normalization later this year."
- Wells Fargo Securities (based on Reuters)
Pair's Outlook
The Sterling misbehaved at the beginning of the week, as it sustained minor losses, rather than appreciating against the US currency. The 1.56 level failed to prevent the fall, which led the Cable to close at 1.5568, namely at the 20-day SMA. The British Pound is expected to partially negate yesterday's losses and edge closer to 1.56 again. Furthermore, the 20 and 55-day SMAs have prevented the GBP/USD from declining during the previous four times and should help give rise to a rebound.
Traders' Sentiment
Bulls regained some confidence, as 55% of positions are long today, compared to 52% yesterday. The portion of purchase orders, on the other hand, dropped from 56 to 53%.
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