British Pound May Have Set Important Highs
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Trade Implications – GBPUSD: FXCM SSI data showed that the ratio of open short positions to long positions in GBPUSD hit a remarkable 9.2 to 1 as it traded to multi-year highs. Yet long positions have since surged by 95 percent while short positions have fallen 20 percent.
Our purely sentiment-based Momentum2 trading strategy has done well buying into Sterling gains. Yet the sharp swing in positions means it is quite close to getting short. A daily key reversal likewise suggests the next move in GBPUSD will be lower.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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