‘The old floor at $1.24 now becomes important resistance, though, before it, we suspect a recovery from the current stretched condition will be more limited.’ – BBH (based on FXStreet)
Pair’s Outlook
Some uncertainty in Yellen’s speech of Friday caused the British currency to erase all intraday losses and end the day with a 33-pip rally against the US Dollar. Now the Cable faces an important psychological support, namely the 1.2250 level, as a breach would likely lead to a drop to the 1.20 major level. Even though technical indicators are giving mixed signals in the daily timeframe, the possibility of a recovery is also doubtful, as the 1.23 mark acts as a tough resistance, which the GBP/USD could struggle to overcome today. Ultimately, the Sterling is expected to retest the bearish trend-line again, before a plunge towards 1.20 could become achievable once again.
Traders’ Sentiment
Today 61% of all open positions are long (previously 58%). At the same time, the number of purchase orders edged up from 48 to 59%.
