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"Brexit risk has become more two-sided coin because of the size of the Brexit risk discount in the GBP, now that the discount is there, positioning and short-term valuation in GBPUSD indicate the strong possibility of a short squeeze".
- BMO Capital Markets (based on PoundSterlingLive)
Pair's Outlook
The British Pound succeeded in outperforming the US currency at the beginning of the week, thus, retaking the 1.39 major level. Today the Cable remains caged between the weekly PP at 1.4012 and the cluster around 1.3750, represented by the Bollinger band and the weekly S1. However, technical studies retain their bearish signals, suggesting that the pair could erase some of yesterday's gains. Nevertheless, there is still room for more than a 90-pip rally towards the nearest resistance, in case the Buck loses significantly more long positions later.
Traders' Sentiment
The percentage of Sterling long positions open in the SWFX market keeps oscillating between 63% and 65%, with the lowest of the two prevailing today. At the same time, the share of buy orders barely changed—increased from 58 to 59%.
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