British Pound to Continue Rally
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 ratio of long to short positions in the GBPUSD stands at -1.56 as nearly 61% of traders are short. This is modestly less extreme than yesterday when 63% of traders were short.
Trading crowds remain heavily net-short, but it is important to note that short positioning is down 29.2% in the past seven days. Typically we see such moderations in positioning when the trend may slow, and indeed it seems that the GBPUSD may consolidate before making any major moves higher. As long as our SSI remains net-short, however, we will maintain a modestly bullish contrarian bias.
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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