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British Pound Forecast to Rally Further

British Pound Forecast to Rally Further

David Rodriguez, Head of Product
ssi_gbp-usd_body_Picture_8.png, British Pound Forecast to Rally Further

Retail FX trading crowds are now their most aggressively net-short the British Pound against the US Dollar (ticker: USDOLLAR) since the GBPUSD last traded near the $1.61 mark. Such one-sided sentiment warns that the British Pound have may further room to rally—especially as it challenges key technical resistance at July highs of $1.5720.

It is worth noting the significant divergence between EURUSD and GBPUSD crowd positioning and sentiment. The Euro continues to press near fresh lows, but the British Pound remains resilient against the US currency. Given that the Dow Jones FXCM Dollar Index now trades near July lows, a larger GBP rally versus the suddenly-downtrodden USD may be imminent.

--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com

To receive the Speculative Sentiment Index and other reports from this author via e-mail, send a message with subject line “Distribution List” to drodriguez@dailyfx.com

Meet the DailyFX team in Las Vegas at the annual FXCM Traders Expo, November 2-4, 2012 at the Rio All Suite Hotel & Casino. For additional information regarding the schedule, workshops and accommodations, visit the FXCM Trading Expo website.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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