Slowly but surely, the pound has been trying to stem the tide against the US dollar's popularity. Cable has completed a gentle rounded bottom on the daily candle chart with a bullish crossover in the moving averages. It must now tackle trend-line resistance and the negative forces provided by the descending Ichimoku cloud. And will it? We believe it should manage a break higher and that, along with other major currencies, it will recover some of their losses over the next few months. In other words, too many investors are already positioned for an ever-stronger dollar and this has become an overcrowded trade. The next target is US$1.575.
