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- Morgan Stanley (based on Reuters)
Pair's Outlook
The British Pound weakened against the US Dollar on Wednesday, ultimately closing with a 99-pip loss over the day, but without the immediate support area being reached. Today risks are still skewed to the downside, as the BoE is expected to cut its interest rate by half, which is considered to be negative for the UK currency. As a result, the Cable could fall back towards the 1.2855 level, where the one-year support line is located. Technical indicators are in favour of this outcome, but volatility could even stretch out further, namely towards the 1.26 major level. On the other hand, a surprise of leaving the rates unchanged would only prolong the Sterling's bullish momentum.
Traders' Sentiment
Bullish traders' sentiment returned to its Tuesday's level of 64%, while the portion of sell orders slumped from 74 to 52%.
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