British Pound Sentiment Sees Key Shift - What Does it Tell Us?
Following the Euro rally and US Dollar sell-off on French election results, retail traders in the IG Client Sentiment sample have aggressively pulled back on GBP/USD positioning. See below for the key moves and follow real-time analysis via the IG Client Sentiment page.
Source: IG Client Sentiment.
GBPUSD: Retail trader data shows 48.5% of traders are net-long with the ratio of traders short to long at 1.06 to 1. In fact, traders have remained net-short since Apr 12 when GBPUSD traded near 1.24863; price has moved 2.4% higher since then. The number of traders net-long is 12.6% higher than yesterday and 15.9% higher from last week, while the number of traders net-short is 11.4% lower than yesterday and 3.6% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBPUSD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current GBPUSD price trend may soon reverse lower despite the fact traders remain net-short.
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