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British Pound at Make-or-Break Levels

British Pound at Make-or-Break Levels

David Rodriguez, Head of Product
ssi_gbp-usd_body_Picture_5.png, British Pound at Make-or-Break Levels

Retail trading crowds have recently sold into British Pound rallies against the US Dollar (ticker: USDOLLAR), and a contrarian reading of crowd behavior calls for further gains. Yet retail traders are mostly range traders, and exceedingly low volatility often favors selling into strength and buying into weakness.

The average daily range on the British Pound/US Dollar is currently at its smallest in five years, and we hesitate to call for a major GBPUSD break higher given extremely quiet FX market conditions. If the British Pound remains below critical resistance at multi-month highs of $1.5770, we may indeed look to sell a turn lower towards month-to-date lows of $1.5460.

How do we interpret and trade with the SSI? Watch an FXCM Expo Presentation that explains the SSI.

--- 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; Contact David via Twitter at http://www.twitter.com/DRodriguezFX

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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