British Pound Pullbacks May be Bought
GBPUSD – Forex trading crowds remain their most aggressively net-short British Pound against US Dollar (ticker: USDOLLAR) since the GBPUSD traded to $1.65 in October, 2011, and we have little choice but to call for further short-term gains. The Dow Jones FXCM Dollar Index today broke critical support, and indeed this supports calls for GBPUSD strength.
That said, a bullish GBP forecast does not need to be expressed via the GBPUSD pair itself. The British Pound looks attractive against the Euro and other major counterparts, while GBPUSD pullbacks could potentially provide fresh buying opportunities.
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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