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"We believe that the Fed will refrain from raising rates today. But at the same time, it will indicate that it is highly likely to raise rates by the end of the year."
- Nomura Securities (based on Reuters)
Pair's Outlook
Despite the bearish signals the Cable jumped more than 170 pips yesterday on poor US and strong UK data. While many resistances fell victim to the rally, one of the main clusters at 1.5526/1.5491 prevented further advancement. Intactness of this area, created by the 55 and 100-day SMAs and by the monthly PP, is required for the scenario of a sell-off to the Aug low remain valid. Otherwise GBP will be expected to test the last month's high instead.
Traders' Sentiment
Today there are slightly less bulls than yesterday. The share of longs fell from 59 to 57%. The distribution between the buy and sell orders was also little changed. The advantage of the latter contracted from 22 to 20 percentage points.
© Dukascopy Bank SA