GBP/USD Ratio: -1.71 Signal: Bullish
GBPUSD – Yet another range reversal for GBPUSD kept speculative traders on the right side of the market. With most of the majors holding back from key dollar-based breakouts, the presence of a five-month old support zone around 1.94 led the pound-denominated pair to a sharp rebound back to the top of a quickly closing wedge formation. Now, with the SSI standing at -1.71, retail traders are clearly growing more brash with playing a very mature range. Positioning details reveal traders have to take profit rather quickly given the narrowing range with which to work with. Long GBPUSD positions dropped 16.8% since yesterday and were a notable 36.9% below last week’s levels. Better reflecting the rising level of reliance on the pair’s well-traversed range, short trades jumped 37.9% from Wednesday and surged 90.6% from last week. Further showing the exaggerated confidence in a quickly deteriorating technical formation, open interest has jumped 11% from last week and is 13.9% above the monthly average. It is only a matter of time before a break out occurs; and the retail sector will no doubt be caught in the undertow.