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GBPUSD – A meaningful pullback in retail FX trader sentiment has helped confirm a potentially significant British Pound reversal versus the US Dollar.
Trade Implications – GBPUSD: Last week we noted a material shift in retail trader positions as a key warning that the GBP could continue higher. Traders had remained mostly net-long the GBPUSD from Q2, 2014 but had turned net-short. And though our data shows that ‘the crowd’ is now very modestly net-long, the much larger jump in overall short positions gives us contrarian signal that the GBP may continue higher.
See next currency section: USDJPY - US Dollar Likely to Remain in Range versus Yen
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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