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Pound to Remain Resilient but Breakout Unlikely

Pound to Remain Resilient but Breakout Unlikely

David Rodriguez, Head of Product
ssi_gbp-usd_body_Picture_6.png, Pound to Remain Resilient but Breakout Unlikely

GBPUSD – Retail FX trading crowds continue to sell the British Pound against the US Dollar (ticker: USDOLLAR) as it tests key highs. We would normally take this as a contrarian signal to price action and call for further GBPUSD gains, but it’s important to note that our data shows that retail traders tend to do well in slow-moving FX market conditions.

We’ll take a cautiously bearish British Pound bias as FX Options data shows volatility expectations trade near five-year lows. We would obviously change our stance if we see an important jump in FX vols, but until that happens we see little option but to favor further US Dollar consolidation across the board.

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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