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.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bearish
Wall Street
Mixed
Gold
Mixed
GBP/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • #Dogecoin up over 13% as Elon Musk tweets he is working with #Doge devs to improve system transaction efficiency, adding it is 'potentially promising' This is a day after #Tesla suspended Bitcoin payments for vehicle purchases, courtesy of @FxWestwater - https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/asia_am_briefing/2021/05/12/Bitcoin-BTC-Plunges-on-Tesla-Bitcoin-Suspension-AUDUSD-Spars-USD-Strength.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/NlPFPbGGSL
  • RT @Yeap_IG: Historical 10-2 #Treasury spread after each recession may suggest further room for upside for 10-year #yield from current leve…
  • 10 out of 11 S&P 500 sectors ended higher, with 88.1% of the index’s constituents closing in the green. Industrials (+1.90%), financials (+1.87%) and utilities (+1.79%) were among the best performers, whereas energy (-1.35%) trailed behind. https://t.co/HUPMnYAEsL
  • US Dollar Outlook: DXY Index Eyes Retail Sales Data, Yields -via @DailyFX Link to Full Analysis: https://www.dailyfx.com/forex/fundamental/us_dollar_index/usd_trading_today/2021/05/13/us-dollar-outlook-dxy-index-eyes-retail-sales-data-yields.html $USD #Forex #Trading https://t.co/10Hb8pYSp1
  • 🇳🇿 Business NZ PMI (APR) Actual: 58.4 Previous: 63.6 https://www.dailyfx.com/economic-calendar#2021-05-13
  • The Japanese Yen may fall against its major peers, but there is room for a near-term climb that wouldn’t necessarily overturn a bearish technical bias. USD/JPY is eyeing support. Get your market update from @ddubrovskyFX here:https://t.co/AEnQCXnwAL https://t.co/kUV7xoSWxZ
  • Heads Up:🇳🇿 Business NZ PMI (APR) due at 22:30 GMT (15min) Previous: 63.6 https://www.dailyfx.com/economic-calendar#2021-05-13
  • Chile central bank holds rate at 0.5% - BBG
  • The S&P 500 has broken beneath an important trendline from March 2020 as losses mount. Get your S&P500 market update from @PeterHanksFX here:https://t.co/aAc3vrKr7M https://t.co/RwQajLrpJy
  • USD/CAD briefly traded up to 1.22 before retreating to its current level around 1.216 $USDCAD https://t.co/eNc4JmYfKI
How to Trade the British Pound if You Think It's Been Oversold

How to Trade the British Pound if You Think It's Been Oversold

Martin Essex, MSTA, Analyst

Talking Points

- GBP/USD has still failed to break through resistance in the 1.3000-1.3030 region.

- However, IG Client Sentiment data suggest that GBP/JPY could strengthen and that the current EUR/GBP uptrend may soon reverse lower.

- Check out the DailyFX Economic Calendar and see what live coverage of key event risk impacting FX markets is scheduled for the week on the DailyFX Webinar Calendar.

Traders who think that the British Pound has been oversold because of worries about Brexit and concerns about the UK economic outlook would be better off buying GBP/JPY or selling EUR/GBP than buying GBP/USD, according to the latest IG Client Sentiment data.

The purchasing managers’ indexes released this week for the UK manufacturing and construction sectors were weak, and therefore negative for the Pound. However, the Bank of England’s rate-setting monetary policy committee appears to be inching its way towards tightening UK interest rates so the negative sentiment towards the currency may been overdone.

If you think that’s the case, it might be better not to buy GBP/USD, which continues to struggle to break through the strong resistance in the 1.3000-1.3030 area. Despite having tried several times recently to stay above that level, it has failed.

Chart: GBP/USD Daily Timeframe (April 2017 – July 4, 2017)

How to Trade the British Pound if You Think It's Been Oversold

Chart by IG

Instead, the IG Client Sentiment data suggest that buying GBP/JPY or selling EUR/GBP are both better options. In GBP/JPY, traders are currently further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger GBP/JPY-bullish contrarian trading bias.

How to Trade the British Pound if You Think It's Been Oversold

In EUR/GBP, traders are currently less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current EUR/GBP price trend may soon reverse lower despite the fact traders remain net-short.

How to Trade the British Pound if You Think It's Been Oversold

Overall, therefore, trading GBP/JPY or EUR/GBP may both be better options than trading GBP/USD if you reckon that the British Pound is due for a rally.

--- Written by Martin Essex, Analyst and Editor

To contact Martin, email him at martin.essex@ig.com

Follow Martin on Twitter @MartinSEssex

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

DISCLOSURES