‘Our analytical focus remains on USD. The past week’s USD downward correction may be challenged when the Fed releases its statement on Wednesday.’ – Morgan Stanley (based on PoundSterlingLive)
The British currency sustained further losses against the US Dollar on Monday, with the immediate demand area around 1.2515 failing to limit the losses. Although the Cable slipped back under 1.25 yesterday, another tough support area is now likely to keep the pair afloat. The support cluster is formed by the monthly PP, the weekly S1, the 20 and the 55-day SMAs, all located around the 1.24 major level. However, the 100-day SMA could also play its part and still trigger a rebound. Technical indicators also suggest the Sterling could edge higher today, but with the 1.26 mark remaining intact, as there is no impetus present for a surge that far up.
Today 60% of traders are long the Pound (previously 62%). At the same time, the portion of sell orders inched up from 54 to 55%.