In spite of bearish signs, the Sterling managed to appreciate against the US Dollar on Tuesday, successfully retaking the 1.27 level. Gains were limited by the monthly S1, but this area risks getting overcome today, with focus being on the Fed meeting. A rate hike is priced in, but a dovish outlook is still somewhat expected, which is to strengthen the Cable further and allow it to approach the 1.29 handle. However, technical indicators keep giving strong bearish signals, refusing to confirm the possibility of the positive outcome. A hawkish surprise from the Fed could be the result, in which case the GBP/USD pair is likely to retreat towards the monthly S2 at 1.2624 again and possibly even pierce it. Meanwhile, traders remain undecided, as their sentiment is relatively neutral—54% of all open positions are long.
