British Pound Looks to Trade to Fresh Lows
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GBPUSD – Retail forex crowds remain short the GBPUSD—normally enough to keep us bearish. Yet positioning has moderated sharply from last week, and one of our sentiment-based trading strategies has recently sold into GBP weakness.
Trade Implications – GBPUSD: We pointed out last week that there was risk of an important GBPUSD top as it traded near key resistance, and confirmation would come if our Momentum2 strategy were to sell. Indeed, the system has now gone short from $1.6048, and our Senior Technical Strategist points out that a GBPUSD close below $1.5893 would confirm a double-top.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.