GBPUSD – Forex trading crowds turned aggressively short the British Pound against the US Dollar when it traded above $1.54, giving us consistent contrarian signal that the GBPUSD may in fact continue onto fresh highs.
Yesterday we warned on our DailyFX PLUS SSI update that crowds were close to flipping to net-long and the GBPUSD could in fact stage an important turn lower. Yet that never happened, and indeed our GBP SSI ratio stands at -1.93 as 66% of traders are short. Long positions tumbled 30% overnight while shorts are up 15%.
The GBPUSD currently trades quite close to significant resistance at previous spike-highs and 200-day Simple Moving Average resistance near $1.5930. It may be make-or-break time for the fast-rising British Pound.
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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