‘The fact that the GBP now appears cheap is insufficient to sustain a credible recovery by the currency at this stage. We recommend selling sterling on any temporary rally triggered by a shift in market focus. We maintain our target for EUR/GBP close to 0.90 and GBP/USD well below 1.20 in Q3.’ – SEB Bank (based on PoundSterlingLive)
Pair’s Outlook
The GBP/USD pair was close to touching the 1.21 mark on Tuesday, the lowest level in two months; however, it was able to stabilise above the 1.2150 mark. A sharp rebound was registered earlier today, but the cause of it is USD weakness rather than GBP strength, with US Treasury yields weighing on the US currency. A lot can change after Fed’s Minutes are released, which is the main market driver today. First of all, the Cable risks falling under 1.21, should the Fed deliver on a rate hike and provide insight concerning future ones this year. On the other hand, any disappointment would help the Pound regain some ground, with the 1.23 easily seen retaken.
Traders’ Sentiment
Bullish traders’ sentiment grew stronger, as now 68% of all open positions are long. The share of buy orders edged up from 50 to 56%.
