"We believe there is scope for GBP/USD to benefit from a further softening of the US dollar, most likely in response to a further scaling back in US stimulus prospects. As such, we forecast the currency pair to move towards 1.30 by end-2017."
– Lloyds Bank (based on FXStreet)
Pair’s Outlook
Poor US fundamentals on Friday allowed the British Pound to erase most of Thursday’s losses against the US Dollar, causing the six-month down-trend to be put to the test again today. From the technical perspective the GBP/USD currency pair should now undergo another decline, with the weekly pivot point and the 20-day SMA circa 1.2490 limiting the losses, assuming the 1.25 major level is breached. However, technical indicators keep giving bullish signals in the daily timeframe, suggesting the trend-line might be pierced soon. A breach would not imply a complete trend reversal, as the 200-day SMA near 1.2930 is required to be overcome for that to occur.
Traders’ Sentiment
Bulls barely remain in control, as 54% of all open positions are long. At the same time, 51% of all pending orders are to sell the Sterling.
