British Pound Forecast Weakens on Crowd Trading
GBPUSD – Forex trading crowds have remained net-short the British Pound against the US Dollar since the pair traded near the 1.5600 mark, providing strong contrarian signal to go long. Yet the ratio has since moderated significantly and warns that gains may slow or soon reverse. The ratio of long to short positions in the GBPUSD stands at -1.40 as nearly 58% of traders are short. Yesterday, the ratio was at -1.62 as 62% of open positions were short. In detail, long positions are 10.2% higher than yesterday and 18.9% stronger since last week. Short positions are 5.4% lower than yesterday and 16.5% weaker since last week. Open interest is 0.5% stronger than yesterday and 1.0% below its monthly average. The SSI is a contrarian indicator and signals more GBPUSD gains. Yet the recent build in long positions gives us pause on our otherwise-bullish bias.
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