Pound faces tough resistance against dollar – calls updated

Pound is relatively buoyant and trading strong against most major counterparts as Bank of England (BOE) is likely to be next in line after FED in hiking rates.

However pound bulls seem to be facing tough resistance against dollar and remains halted below 1.57 mark.

Focus is likely to turn on pound, once the FED hike is done with, probably in September.

A rate hike by FED in September is likely to be followed by quite a dovish statement from Janet Yellen. Immediate asking about the next hike might run into nothing.

Dollar bulls, who are eagerly awaiting the rate hike from FED, might actually run into a void, once it's done with.

BOE is most likely to fill in to that void, unless inflation surprises to the upside.

Trade idea -

• Previous call was given around 1.55 area to go long on pound, with stop around 1.535 and 1.595 area as target. We are not completely scrapping the call, but temporarily withdrawing it in the short run, since some opportunity is looking ripe to the downside. It would be booked on profit even if closed now.
  
  
• New trade idea - Go short on pound at 1.561 (current price), with stop around 1.57 and target of at least 150 points. Do remember it is a short term call with nice risk reward. Pound is likely to remain strong against other pairs.