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GBPUSD – The British Pound likely turned the corner as a substantial shift in retail FX trader sentiment warns the tides have turned for the GBPUSD.
Trade Implications – GBPUSD: Traders in our sample have remained net-long the British Pound versus the US Dollar from Q2, 2014 with few interruptions. Consistently one-sided sentiment gave us a contrarian signal that the pair could continue lower, but the most recent reading shows that ‘the crowd’ is now net-short for the first time since October, 2014.
The material shift coincides with broader signs of a Dollar reversal, and indeed we favor further upside in the GBPUSD through near-term trading.
See next currency section: USDJPY - US Dollar may Break Down versus Japanese Yen
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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