British Pound Rallies Offer Selling Opportunities
GBPUSD – Trading crowds have bought aggressively into British Pound weakness, and our contrarian Speculative Sentiment Index points to further near-term GBPUSD declines. The retail crowd recently hit its most bullish GBPUSD since it hit multi-year lows through late 2011, and our contrarian Speculative Sentiment Index calls for further weakness.
Our sentiment-based forex trading strategies have sold into recent British Pound weakness against the Japanese Yen with success. As far as the British Pound/US Dollar goes, we see important risks of a short-term bounce. In fact our Technical Strategists favor selling GBPUSD into 1.6000 or GBPUSD shorts from $1.59.
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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