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GBPUSD–Retail traders have bought aggressively into continued British Pound weakness, and a contrarian view of crowd sentiment points to continued GBP declines.
The ratio of long to short positions in the GBPUSD stands at 1.93 as 66% of traders are long. Yesterday the ratio was 1.84; 65% of open positions were long. Long positions are 12.3% higher than yesterday and 6.7% above levels seen last week. Short positions are 7.3% higher than yesterday and 7.5% above levels seen last week. Open interest is 10.5% higher than yesterday and 12.6% above its monthly average. We use our SSI as a contrarian indicator to price action, and the fact that the majority of traders are long gives signal that the GBPUSD may continue lower. The trading crowd has grown further net-long from yesterday but moderated since last week.
See next currency section: USDJPY - Retail FX Traders Do Well as they Buy USDJPY Gains
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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