Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

Free Trading Guides
Please try again

Live Webinar Events


Economic Calendar Events


Notify me about

Live Webinar Events
Economic Calendar Events






More View More
GBP/USD Retail Shorts Jump, Open Interest Rises Going Into EU Summit

GBP/USD Retail Shorts Jump, Open Interest Rises Going Into EU Summit

Talking Points:

- GBP/USD Retail Shorts Jump, Open Interest Rises Going Into EU Summit.

- USDOLLAR to Pare Losses on Sticky CPI, Upbeat Fed Rheotric.

For more updates, sign up for David's e-mail distribution list.


GBP/USD Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • With market participants turning their attention to the EU Summit, the near-term bounce in GBP/USD may quickly fizzle should the U.K. fail to strike a deal; even though the Relative Strength Index (RSI) threatens the bearish formation from May, the triangle/wedge formation (continuation pattern) may lead to a further decline as the pair largely retains the downward trend carried over from the previous year.
  • Nevertheless, an agreement to keep the U.K. within EU may fuel a larger recovery in the exchange rate especially as Bank of England (BoE) Deputy Governor Jon Cunliffe highlights stretched market speculation and argues against the material shift in interest-rate expectations.
  • In light of bounce, would need to see GBP/USD climb/close back above 1.4510 (23.6% retracement) to 1.4520 (38.2% retracement) to favor a larger advance in the days ahead.
  • The DailyFX Speculative Sentiment Index (SSI) shows retail crowd remains net-long GBP/USD since November 19, with positioning hitting an extreme in January as the ratio climbed above +3.00.
  • Despite the recent pickup in the SSI, the ratio has come off of recent extremes as it narrows to +1.82, with current figures highlighting a 15.4% jump in short positions from the previous week.

Why and how do we use the SSI in trading? View our video and download the free indicator here

Join DailyFX on Demand for Real-Time SSI Updates Across the Majors!

USDOLLAR(Ticker: USDollar):

IndexLastHighLowDaily Change (%)Daily Range (% of ATR)
DJ-FXCM Dollar Index12092.8912108.9912079.890.0145.53%
Please add a description for the image.

Chart - Created Using FXCM Marketscope 2.0

  • The USDOLLAR stands at risk for a further decline as the RSI preserves the bearish formation from earlier this year, while Fed officials appear to be adopt a more cautious outlook as St. Louis Fed President James Bullard warns that it will be ‘unwise to continue a normalization strategy in an environment of declining market-based inflation expectations.’
  • The U.S. Consumer Price Index (CPI) may prop up the greenback as the report is anticipated to show sticky price growth, but dovish comments from Cleveland Fed President Loretta Mester, a 2016 voting-member, may dampen the appeal of the dollar as market participants push out bets for the next rate-hike.
  • Will keep a close eye on the monthly rate as the USDOLLAR consolidates ahead of the last full-week of February, with the next downside region of interest coming in around 11,986 (61.8% retracement).

Read More:

EUR/USD – Breakout Hangs in the Balance

USD/JPY Technical Analysis: Best 2-Week Run For JPY Since 1998

Crude Oil Turn in the Pipeline?

USD/JPY - The Abenomics Test

Get our top trading opportunities of 2016 HERE

Avoid the pitfalls of trading by steering clear of classic mistakes. Review these principles in the "Traits of Successful Traders" series.

--- Written by David Song, Currency Analyst

To contact David, e-mail Follow me on Twitter at @DavidJSong.

To be added to David's e-mail distribution list, please follow this link.

Trade Alongsidethe DailyFX Team on DailyFX on Demand

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.