GBPUSD – Forex trading crowds have turned aggressively short the British Pound against the US Dollar since it traded above $1.5400, giving us consistent contrarian signal that the GBPUSD may in fact continue onto fresh highs.
Our SSI ratio of long to short positions in the GBPUSD stands at -2.37 as nearly 70% of traders are short. It is worth noting that short interest is down an important 38% since last week, while long interest fell a lesser 11% through the same stretch. The significant week-over-week slowdown in selling warns that the pace of gains may slow.
Yet trading crowds remain aggressively net-short, and we see few signs of imminent reversal. Our bias remains bullish until further notice.
How do we interpret the SSI? Watch an FXCM Expo Presentation that explains the SSI.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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