Aggressive Shift in Forex Trader Sentiment Favors British Pound Strength
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GBPUSD –The ratio of long to short positions in the GBPUSD stands at -1.44 as 41% of traders are long. Yesterday the ratio was 1.07; 52% of open positions were long. Long positions are 2.4% lower than yesterday and 45.4% below levels seen last week. Short positions are 49.8% higher than yesterday and 138.7% above levels seen last week. Open interest is 22.8% higher than yesterday and 25.3% above its monthly average. We use our SSI as a contrarian indicator to price action, and the fact that the majority of traders are short gives signal that the GBPUSD may continue higher. The trading crowd has flipped from net-long to net-short from yesterday and last week. The combination of current sentiment and recent changes gives a further bullish trading bias.
See next currency section: USDJPY - Build in US Dollar Buying Points to USDJPY Declines
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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