‘Rising global inflation should have little impact on GBP, we think, since the BoE is not expected to change policy anytime soon.’ – Morgan Stanley (based on PoundSterlingLive)
Pair’s Outlook
A failure to edge lower on Thursday suggested that the Cable has entered a period of consolidation and is likely to remain within its current trading range today, namely between 1.2750 and 1.29. From a broad technical perspective, another rally is unlikely, due to the weekly R3 and the upper Bollinger band forming resistance just above today’s opening price, while the nearest support rests only at 1.2743, represented by the monthly R1. Furthermore, the GBP/USD pair appears to be gravitating towards the 1.28 mark, which also implies another leg down today is more probable. Meanwhile, technical indicators are giving mixed signals in the daily timeframe.
Traders’ Sentiment
For the fourth day in a row the bull and the bear ratio remains equal to one. At the same time, the share of buy orders surged from 50 to 57%.
