GBP/USD prepares for a test of 1.5243/24

GBP/USD prepares for a test of 1.5243/24

'Sterling's move higher is very much a short-squeeze and not really about people being positive about the UK economy.' - Monument Securities (based on Reuters)

Pair's Outlook

Lately we see alternation of indecision in the market with sharp distinct moves, such as on Mar 14 and 21. This suggests that bulls, who until now have come out on top, are far from being in full control of the pair’s direction. The real test of the upward momentum will be arranged by the resistance at 1.5243/24. Once the latter zone is breached, then the Cable is likely to aim for the 200-day SMA at 1.5843 with 1.54 having a low level of threat to the rally.

Traders' Sentiment

The Sterling remains one of the most popular currencies among the majors, as 58% of all the positions in its crosses are long. An even though the U.S. Dollar does not fall behind in the overall rating of popularity, the sentiment towards GBP/USD is fairly bullish—63% of SWFX traders are long on it.