‘The USD side also looks supportive for further gains in cable, which reflects softer US data surprises, a longer timeline for fiscal reform and a shift in Fed pricing.’ – TD Securities (based on FXStreet)
Pair’s Outlook
UK Prime Minister May’s surprise announcement on Wednesday lifted the Sterling, allowing it to gain more than 270 pips against the US Dollar. The six-month down-trend can now be called completely breached, since the resistance cluster around 1.2610 was also easily pierced. However, the Pound encountered some resistance around the 1.29 handle, which is now the new Cable’s new target. From this point on the British currency is likely to begin sliding down, undergoing a correction, but the monthly R1 at 1.2743 is expected to provide sufficient support to keep the pair elevated.
Traders’ Sentiment
Market sentiment remains equally divided between the bulls and the bears, while the share of purchase orders inched higher, namely from 49 to 51%.
