‘We maintain our view that risk reward for USD longs has improved considerably.’ – BNP Paribas (based on PoundSterlingLive)
The Cable’s losses were limited on Friday, but with the pair continuing to gravitate towards the 1.25 major level. Risks are now skewed to the downside, as there is a potential sell signal present today, which indicates the Sterling could soon slide back under the 1.24 mark. However, the Pound is first required to pierce a number of supports, such as the weekly PP, the monthly PP, the 55 and the 100-day SMAs. Technical studies somewhat support this outlook, as they are giving bearish signals in the medium and long-term timeframes. A rally today is likely to just be the continuation of last week’s consolidation trend, when the Cable kept moving towards the 1.25 handle.
Traders’ sentiment remains bullish, now at 62% (previously 61%). Meanwhile, the share of sell orders inched down from 56 to 53%.