British Pound Stops and Reverses - Is it a True Breakdown?
Trade Implications – GBPUSD: Choppy GBP price action has forced our purely SSI-driven Momentum2 to go both long and short within the past week with mixed results. Our Speculative Sentiment Index most often works as a contrarian indicator to price action in trending market conditions. Most retail traders tend to buy weakness and sell strength, and such a mean-reversion strategy will tend to do fairly well in range-bound markets.
Our Senior Technical Strategist believes that the GBPUSD may continue recent declines, but we will need to see considerable follow-through on the recent US Dollar bounce to maintain confidence in our GBPUSD-bearish bias.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
Download all of our Sentiment-based trading strategies free via an ongoing promo on FXCMApps.com
To receive the Speculative Sentiment Index and other reports from this author via e-mail, sign up for his distribution list via this link.
New to FX markets? Learn more in our video trading guide.
Contact David via
Twitter at http://www.twitter.com/DRodriguezFX
Facebook at http://www.Facebook.com/DRodriguezFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.