‘We expect GBPUSD to drop to 1.23 in 3M on a combination of 1) general USD strength and 2) a rocky start to the UK/EU negotiations for an exit agreement.’ – BMO Capital Markets (based on PoundSterlingLive)
Pair’s Outlook
The British Pound surprised with its performance on Tuesday, being that it outperformed the US Dollar and reclaimed the 1.29 level. Technical indicators today keep giving positive signals, suggesting the Sterling is to edge higher against the Buck for another day. Such an outcome is possible, but in this case gains are likely to be capped around 1.3020, with the broadening rising wedge’s upper border and the weekly R1 representing resistance there. On the other hand, upbeat US fundamentals could boost the Greenback, which would cause the Cable to fall even under the second support, namely the weekly S1.
Traders’ Sentiment
There are 52% of traders holding short positions today (previously 51%), whereas 67% of all pending orders are to acquire the Pound.
