British Pound Expected to Gain
GBPUSD – Forex trading crowds turned net-short the British Pound against the US Dollar when the pair traded near the $1.5450 mark, giving contrarian signal that the pair could continue its advance. The SSI ratio currently stands at -1.57 as approximately 61% of traders are short. Yesterday, that same ratio was at -2.41; Short positions are 27.0% lower than yesterday and 25.3% stronger since last week. Long positions are 11.7% higher than yesterday and 1.4% stronger since last week.
The fact that crowds remain net-short gives us a bullish contrarian bias, but the sudden drop in short interest limits our enthusiasm in fresh GBPUSD long positions.
How do we interpret the SSI? Watch an FXCM Expo Presentation that explains the SSI.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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