Dukascopy - Analytics

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GBP/USD risks going further down the drain

© Dukascopy Bank SA
"As markets are currently pricing the BoE to raise rates even later, we see little risk to our call for a stronger sterling and continue to recommend an overweight position, especially against the Australian dollar."
- UBS (based on Reuters)

Pair's Outlook
The Cable sustained unexpectedly heavy casualties on Wednesday, after the US Durable Goods Orders showed a lot better-than-expected results. The GBP/USD not only dropped under the support trend-line, but also breached the three closest supports, stabilising only at 1.5479. The Sterling risks suffering more weakness, as trade opened just under the 1.55 major level, also bolstered by the weekly S2; however, a break through this area would trigger a rally towards the resistance cluster around 1.5555. Technical studies are now giving mixed signals, unable to confirm either scenario.

Traders' Sentiment
Bulls and bears broke out of equilibrium, with 51% of all positions being long. The number of buy orders increased from 61 to 64%.

© Dukascopy Bank SA


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