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GBPUSD – Retail FX trading crowds continue buying aggressively into British Pound weakness, and a contrarian view of ‘herd’ sentiment keeps us watching for further GBP declines.
Trade Implications – GBPUSD: Our trader sample shows that GBPUSD long positions outnumber short positions by 2 to 1—nearly 70 percent long. Such clearly one-sided sentiment often coincides with important turns in price action, but those sentiment extremes are only clear in hindsight.
We will remain focused on British Pound selling opportunities absent a material change in positions.
See next currency section: USDJPY - Japanese Yen Could Claw Back Losses versus US Dollar
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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