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.

Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Bearish
Wall Street
Mixed
Gold
Bullish
GBP/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
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
  • Support and resistance are the cornerstone of technical analysis, making it the foundation that you build your knowledge on. Build a stronger foundation here: https://t.co/yXLaRpl90I https://t.co/MhP7opgk4a
  • Investors in stocks, commodity currencies and energy have been praying for a massive fiscal bazooka to combat the virus effects. It looks like they’re going to get it. Get your market update from @DavidCottleFX here:https://t.co/e2ciGSYftY https://t.co/Udoi5UMJrl
  • The ‘V-shaped’ recovery in USD/JPY just failed to hit its target and is now moving lower again. Important support is now being tested. Get your $USDJPY technical analysis from @nickcawley1 here: https://t.co/koiac0Rxvs https://t.co/CsVsS7PVMV
  • The Australian Dollar has been lifted from its multi-year lows by hopes that global financial authorities can fend off the worst of the #coronavirus‘ effects. Get your $AUDUSD market update from @DavidCottleFX here: https://t.co/GC5pwNbY9S https://t.co/OryobNq7uL
  • Before considering to enter a position, price action must come into contact with the upper or lower channel line at least three times. Learn how to validate a channel here: https://t.co/Rd5hDm7gRo https://t.co/mubPgmDRRY
  • A tidal wave of cash waits to return to virus-battered assets, backstopped by huge stimulus. It is unlikely to deploy until infection slows, whatever the US administration prefers. Get your market update from @DavidCottleFX here: https://t.co/OWOi2HxejD https://t.co/jvMXT7te1h
  • The bullish engulfing candle is one of the forex market’s most clear-cut price action signals for reversals and continuation. Learn more about this price action trading signal here: https://t.co/edEHzyoCJT https://t.co/vHPSW7Vm96
  • It was a big week for GBP/USD as Cable crushed shorts, rallying more than 1,000 pips off of last week’s lows. Get your $GBPUSD technical analysis from @JStanleyFX here: https://t.co/n6vYfe6Gfh https://t.co/zQq74Zzxsv
  • The bull flag pattern is a great pattern to add to a forex trader’s technical arsenal. Explosive moves are often associated with the bull flag. Learn more about the bull flag pattern here: https://t.co/ZNRBvNELeJ https://t.co/CKkWNMLkuw
  • The US Dollar could rise if key ISM, PMI and nonfarm payrolls data causes recession fears to swell and rekindles appetite for the haven-linked Greenback. Get your $USD market update from @ZabelinDimitri here: https://t.co/iTlnxWuSqn https://t.co/brEsDw2a5K
British Pound Technical Analysis: GBP Biased Lower in Choppy Trade

British Pound Technical Analysis: GBP Biased Lower in Choppy Trade

2020-03-07 22:00:00
Ilya Spivak, Head Strategist, APAC
Share:

BRITISH POUND TECHNICAL FORECAST: NEUTRAL

  • British Pound up vs commodity currencies, down against USD and anti-risk FX
  • Near-term technical positioning, retail trader sentiment studies offer mixed view
  • Monthly chart setup suggests that the overall trend bias favors GBP weakness

The British Pound has put in a mixed performance since the beginning of the year, finding itself toward the middle of the pack of G10 currencies in a landscape polarized by stark risk-on vs. -off sentiment swings. It has edged modestly lower overall, which has been driven by losses against currencies with an anti-risk appeal (USD) and those where the parent central bank has little scope to cut interest rates (EUR, CHF, JPY). Sterling has gained on counterparts with more conventional monetary stimulus space than the BOE and a greater gearing toward the global business cycle (AUD, NZD, CAD).

British Pound performance vs major currencies so far in 2020

British Pound chart created with TradingView

From a technical perspective, positioning looks inconclusive in the near term. An average tracking the Pound’s value against an average of its top counterparts has broken support guiding it higher since early August 2019. The subsequent decline has struggled to build lasting momentum however. In fact, positioning is now telegraphing the possibility that a bullish Triangle continuation pattern might set the stage for the next leg of the advance following a period of consolidation.

British Pound sending mixed signals on near-term technical positioning

British Pound chart created with TradingView

Trader positioning studies are not much more conclusive. The IGCS sentiment indicator shows that 59.13% of retail investors are net-long the bellwether GBP/USD currency pair, with the long-to-short ratio at 1.45 to 1. This is typically a contrarian indicator, so broadly speaking, the net-long skew suggests prices are biased lower. However, the number of traders net-long is 11.96% lower while the number of traders net-short is 64.47% higher from last week. This hints that Sterling may indeed be gearing up to rally.

British Pound vs US Dollar exchange rate, retail trader sentiment

See the full IGCS sentiment report here.

How to Use IG Client Sentiment in Your Trading
How to Use IG Client Sentiment in Your Trading
Recommended by Ilya Spivak
Improve your trading with IG Client Sentiment Data
Get My Guide

On balance, all this makes for a clouded near-term outlook. With that in mind, zooming out to a longer-term view seems instructive. Turning to the monthly chart, the Pound appears well within the bounds of the dominant downtrend in play since January 2007. Most recently, a Bearish Engulfing candlestick pattern at range resistance followed by the break of trend line support set from August 2019 lows. Taken together, this suggest that the broad-based path of least resistance favors the downside.

Long-term British Pound price trend suggests a bearish bias

British Pound chart created with TradingView

--- Written by Ilya Spivak, Sr. Currency Strategist for DailyFX.com

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter

BRITISH POUND TRADING RESOURCES

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

DISCLOSURES

News & Analysis at your fingertips.