‘Sterling is stuck in a range. It’s very cheap on most measures, but then real yields are very low and the current account deficit is very big.’ – Societe Generale (based on PoundSterlingLive)
The GBP/USD currency pair weakened for the third consecutive time on Monday, but managed to remain above the immediate support cluster. Even though this cluster keeps providing strong support today, the Sterling still remains on the back foot. As a result, the Cable is expected to close in the red zone again; however, a full-blown breach of the immediate demand area is unlikely. The Pound is expected to stabilise somewhere between 1.2430 and 1.2415, unless fundamental data turns into Sterling’s favour. Meanwhile, technical indicators are unable to confirm either scenario, as they retain mixed signals.
Market sentiment remains moderately bullish, being that 60% of all open positions are now long (previously 59%). The share of sell orders edged higher again, namely from 56 to 57%.