British Pound Offers Range Trading Nirvana
GBPUSD – Forex trading crowds have been quick to flip directions on the British Pound/US Dollar pair as of late, giving us a mixed bias on the range-bound currency pair. Our SSI ratio currently stands at -1.2; there are 1.2 traders short for every one long. It is certainly worth noting that this is a substantial shift from last week; long interest jumped 37% while shorts fell 33%. Yet we would ideally see stronger conviction before taking a strong GBPUSD trading bias.
Major price congestion levels mark support near $1.5650, while resistance stands at recent highs of $1.5880. A break of either would likely point to further rallies or declines. In the meantime, however, we favor trading GBPUSD ranges and placing stops above highs and below the lows.
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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