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GBPUSD –Retail FX traders remain marginally net-long the British Pound, and a contrarian view of crowd sentiment would typically lead us to call for GBP weakness. And indeed continued failure at major volume-based resistance near $1.5650 remains a key warning; inability to close higher leaves the pair vulnerable to near-term weakness.
It is certainly worth noting that crowds recently turned net-short the GBP/USD for the first time since May, and such shifts in sentiment often occur at key turning points. Yet we’ll need to see considerably more upside traction before taking a strong bias in favor of GBP gains.
See next currency section: USDJPY - US Dollar at Risk of Larger Declines versus Japanese Yen
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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