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GBP/USD forms falling wedge from Thursday's surge

© Dukascopy Bank SA
"It is still easier to support the dollar as the story is no longer just about the Fed hiking rates, but how frequently they could continue to tighten policy."
- State Street (based on Reuters)

Pair's Outlook
The US Dollar experienced a harsh sell-off on Thursday, mainly caused by the ECB's unexpected stimulus decision, as well as a set of weak US fundamentals. As a result, the Cable skyrocketed, meeting resistance only in face of the third cluster at 1.5145, namely the 20-day SMA and the weekly R1. A correction is likely to take place today, forcing the GBP/USD to drop below 1.51, with the target support located at 1.5088 in face of the weekly PP. However, disappointment in the US employment sector could trigger a rally, causing the Sterling to return above the 23.60% Fibo.

Traders' Sentiment
Although the share of bulls remains unchanged at 56%, the portion of orders to buy the Pound added 38 percentage points up to 72%.

© Dukascopy Bank SA


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