GBP/USD closes beneath 200-day SMA

GBP/USD closes beneath 200-day SMA

'Sterling's shelf life above $1.60 is limited, it could drop towards the mid-November low of $1.5828 over the coming week.' - Caxton FX (based on Reuters)

Pair's Outlook

A recent sell-off in GBP/USD resulted in a breach of the 200-day SMA, meaning that the currency pair is well-positioned to continue its decline further. However, only daily studies in aggregate point to the downside, suggesting that the extension of the dip could be postponed. The nearest strong support area lies at 1.5756/42 and is expected to at least initiate a bullish correction, if it is approached.

Traders' Sentiment

The oversold state of the GBP/USD has been almost neutralized over the weekend, as the shares of long and short positions are nearly equal at the moment—47% and 53%, respectively. Orders also do not give a clear insight into preferences of market participants. Buy orders are 52% of the total amount and sell orders are 48% of it.