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"Investors will start to shift back to the Fed being the main driver of currencies if FOMC officials start to signal a June hike in the next few weeks after yesterday's less dovish Fed meeting."
- Royal Bank of Scotland (based on Bloomberg)
Pair's Outlook
The GBP/USD currency pair underwent a small correction on Wednesday, being weakened by the FOMC statement. Nonetheless, the Cable remained above the immediate support area, namely the weekly R1, which keeps the pair elevated even today. The Sterling has the potential to erase yesterday's losses and climb over the 1.46 major level, with the nearest resistance being the Bollinger band, the monthly R1 and the weekly R2 around 1.4620. The medium-term trend has been bullish for almost four weeks now, with the Pound expected to continue edging higher until the resistance line around 1.49 is reached.
Traders' Sentiment
Traders' sentiment shifted to the bearish side today, as 52% of traders are now short the British Pound (previously 47%). The number of buy orders, however, edged up 15% points, having risen up to 60%.
© Dukascopy Bank SA