British Pound at Risk of Renewed Declines on a Failure Here
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GBPUSD – Retail forex traders have most recently sold into British Pound gains versus the suddenly-downtrodden US Dollar. Yet our trader data shows that the majority remain net-long and have remained so since the Sterling broke below the $1.56 mark in July. Until we see a more marked shift towards crowd selling we see little reason to abandon our contrarian calls for GBP weakness.
The $1.5650 level represents a major test for the British Pound; whether or not it holds below will likely decide foreseeable direction in the GBP/USD exchange rate.
See next currency section: USDJPY - US Dollar Remains in a Strong Position versus the Japanese Yen
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.