‘There are still geopolitical concerns, such as the Syrian situation, in the background, and there are no fresh incentives or reasons to buy the dollar.’ – Sony Financial Holdings (based on Reuters)
A rather unexpected development occurred on Friday, being that the British Pound fell under sharp selling pressure, while the Greenback soared across the board. The US NFP data sharply disappointed, but an upbeat reading of the unemployment rate, as well as a surge in US Treasury bond yields, were the catalysts. As a result, the Cable slumped back under 1.24, breaching the tough support cluster, which somewhat confirms the six-month down-trend. Technical studies insist the GBP/USD pair is to undergo a bullish correction today, but downside risks remain high, with the nearest support located only at 1.2310, namely the weekly S1.
Today 61% of traders hold long positions (previously 59%), whereas 53% of all pending orders are to sell the Pound, up from 50% on Friday.