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GBPUSD – A significant shift in retail forex sentiment serves as early warning that the British Pound may have set a lasting top versus the US Dollar.
Trade Implications – GBPUSD: Retail FX crowds have remained net-short the British Pound since it traded above $1.52, but a sharp turn in price has been met with a similarly important turn in crowd behavior. In fact long positions are up 70 percent since last week and total long interest is at its highest in 10 months.
It’s possible that this is a minor correction within the larger GBP uptrend, but our Senior Strategist warns that Cable will need to climb above $1.6920 to restore confidence in the bullish trend. A failure below $1.6695 would turn us further bearish the previously high-flying GBPUSD.
See next currency section:USDJPY - Dollar in Danger of Major Break versus Japanese Yen
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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