Positive… well sort off

Looking at the short term outlook for the pound / US dollar exchange rate we note momentum remains with the pound.

A look at the 30 minute chart by analysts at Trading Central has revealed that a preference for long positions above a pivot point located at 1.5125 with targets set at 1.526 and 1.53 in extension.

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Alternatively, should 1.5125 be broken to the downside analyst suggest we should be on the look out for further downside with 1.5025 & 1.498 as targets.

"The RSI is bullish and calls for further upside," say Trading Central.

But, before you go rushing into the British pound, consider this

Camilla Sutton at Scotiabank agrees that the near-term favours the British pound over the US dollar, but it could be worth waiting for more positive signals:

"GBP-USD short‐term technicals are mixed but shifting to bullish signals. The MACD has generated a buy signal as has the DMI; however the 9-day MA has yet to cross the 21-day; while resistance provided by the 50 and 100-day MA (1.5286 and 1.5265, respectively) is proving a headwind. The bias for near-term traders is long GBP; however signals are not yet particularly strong."

Luc Luyet at MIG also echoes concerns about the strength of GBP-USD:

"GBP/USD rose yesterday leading to new highs. However, the strong resistance at 1.5305 has thus far held. Hourly supports are at 1.5154 (intraday low) and 1.5028.

"In the longer-term, the break of the horizontal range defined by the strong support at 1.5235 (13/01/2012 low) and the strong resistance at 1.6302 (30/04/2012 high) calls for a further medium-term decline. The recent sharp bounce does not change this scenario. A key resistance is at 1.5305."

One thing we can be sure of is increased volatility

Richard Wiltshire, Chief Dealer Foreign Exchange at ETX Capital, says he expects the outlook for the GBP-USD to get increasingly choppy ahead of August's Bank of England meeting:

"From the MPC the less than dovish minutes and the rather surprising 9-0 vote caught a market, happy to trade £ from a short perspective, on the hop a little and the 130 pip surge in cable had a few shorts running for cover as stops were squeezed but forays towards mid 1.52 levels saw the upward Sterling momentum run out of steam.

"Then this morning we had slightly better than expected Retail Sales data (today’s reading coming in at 2.1% vs 1.6%) and although not having the dramatic effect of yesterdays minutes some GBP shorts seems to be reducing or unwinding positions as the seemingly one way short £ bet looks to have run out of value since Mr Carneys arrival, and players seem to want less exposure in the “Queens Currency” ahead of the August MPC vote and inflation reports where future “guidance” and “tolerance” levels will become cleare

"For Cable, sellers were noted on rallies above 1.5250 yesterday and the 100 DMA sits around the 1.5265/70 area whilst downside support levels are said to be 1.5050/80 region."