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"A devalued yuan makes the dollar stronger, further weighing on US exporters and is also a reaction to China's weak economic position which is a negative for global growth."
- CMC Markets (based on WBP Online)
Pair's Outlook
The Cable experienced some volatility on Tuesday, trading within the borders of the monthly PP and weekly R1. Ultimately, the pair remained relatively unchanged, having lost only three pips. Nevertheless, technical studies now shifted to the bearish side, suggesting the Sterling is to weaken against the US Dollar again today. Although the immediate support remains around 1.5560, a fall towards the weekly PP at 1.5520 is more likely, especially if the fundamental data disappoints a lot more than anticipated.
Traders' Sentiment
Bulls remain rather weak, as still only 51% of positions are long. Meanwhile, the share of orders to acquire the British Pound declined from 58 to 54%.
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