‘Data, politics and widening yield spreads should override rising short positioning as GBP/USD slides towards 1.20, if not 1.1850, even though broader range trading is likely to remain.’ – Westpac (based on FXStreet)
Pair’s Outlook
The psychological 1.2150 mark once again successfully provided strong support, causing the Cable to rebound and put the 1.23 major level to the test yesterday. However, the pair was reluctant to maintain trade above 1.23, suggesting that a bearish correction could occur today. The BoE’s meeting results could be negative for the Pound today, in which case most of yesterdays gains risk getting erased. Technical indicators are also in favour of the bearish scenario; on the other hand, the Sterling is seen taking another step towards the down-trend at 1.2450 if the BoE is hawkish today. We maintain a relatively positive outlook, with the trend-line expected to be reconfirmed in the near future.
Traders’ Sentiment
There are 70% of traders holding long positions today (previously 68%), while the share of purchase orders inched up 56 to 65%.
