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British Pound Forecast to Gain further versus Japanese Yen

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

GBPJPY–Heavily one-sided retail FX trader sentiment suggests that the British Pound may continue to rally versus the recently-downtrodden Japanese Yen. Our trader sample shows that 61 percent of open positions are currently short the GBP/JPY; a contrarian view of crowd sentiment gives us a bullish short-term trading bias. And indeed, ‘the crowd’ turned net-short GBP/JPY as it traded above ¥185 through early October.

Until we see a substantive shift in positioning, we’ll continue to favor buying into GBP/JPY gains.

See next currency section:USDCAD - US Dollar Remains in Control versus Canadian Dollar

--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com

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