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"If the Fed sounds too dovish a chord, they'll lose the option to raise rates in March. If the Fed isn't so dovish, it's likely US yields will rise, and the dollar will strengthen."
- Sumitomo Mitsui Banking (based on Business Recorder)
Pair's Outlook
The British currency was able to recover from daily losses and end the day with a rally, with a six-week down-trend getting breached. Nevertheless, the immediate resistance was not reached, demand around which, around 1.4415, remains strong. Meanwhile, the closest support is still represented by the weekly PP, but the exchange rate is expected to drop lower if the Fed's statement turns out to be hawkish today. Technical indicators also suggest a decline is due, but the Cable has the potential to touch the 1.45 level.
Traders' Sentiment
Bull lost some numbers today, as 61% of all open positions are long, compared to 65% of Tuesday. At the same time, the portion of purchase orders lost eight percentage points, falling to 58%.
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