British Pound Bias Remains Bearish Despite Bounce
GBPUSD – Forex trading crowds remain long the British Pound versus the US Dollar (ticker: USDOLLAR), but long interest continues to decline while short positioning grows. The fact that retail traders remain net-long leaves our overall bearish bias intact, and indeed we favor British Pound short positions as long as price remains below the pair’s June high at $1.56.
Our proprietary sentiment-based trading strategies have nonetheless gone long GBPUSD on the build in short interest. The long position could succeed if price remains above key support at $1.5400, but our broader preference remains to sell any major GBPUSD rallies (and buy US Dollar dips).
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--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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