GBPUSD Technical Analysis – Still headed higher

The British pound currency has continued to fall against the US dollar as the greenback loses ground on the currency market, ahead of a slew of central bank rate decisions.

The Fed is the main event this week without a doubt, however, sterling traders have been subdued in buying in case the Bank of England throws up any shocks.

Market expectations are for the BoE to raise borrowing costs again, but the market is wondering whether recent stresses in the banking sector might lead to a moderation in their assessments of likely increases to come.

Sterling sentiment has also been hit by recent budget data. The State’s reliance on debt was underlined Tuesday by official news that Public Sector Net Borrowing was £16.7 billion in February.

This marked the highest level for that month since comparable records began in 1993. The figure was largely accounted for by ongoing schemes to help consumers with energy prices.

Looking at sentiment data and how traders feel about sterling, the ActivTrader Market Sentiment tool shows that traders are growing more bearish despite the recent sharp price reversal.

With 59% of traders currently bullish it should be noted that this current sentiment reading is highlighting that sterling still has much scope to trade even lower also.