‘It’s probably going to take some sort of meaningful change in expectations around monetary or fiscal policy to revive the dollar and set it back on a strengthening trend.’ – Erik Nelson, Wells Fargo (based on Reuters)
The strong UK inflation data yesterday helped the British currency to strengthen further against the US Dollar, ultimately causing the nine-month down-trend to be pierced. Trade even managed to close above the monthly pivot point, but that does not necessarily mean that support will be sufficient for another leg up. In case bulls retain the upper hand, the pair could easily overcome the 1.25 major level, with the main target shifting to 1.2672, namely the 23.60% Fibo. However, technical indicators remain mixed, thus, the Cable still risks undergoing a corrective decline, but with the 1.24 mark expected to be intact.
There are 60% of traders being long the Sterling today, compared to 67% on Tuesday. At the same time, 53% of all pending orders are to acquire the Pound (up from 50% yesterday).