British Pound Forecast to hit Further Lows
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GBPUSD – Retail forex traders remain aggressively long the British Pound versus the US Dollar, and a contrarian view of crowd sentiment leads us to believe that a test of key GBP/USD lows remains likely.
The number of open long positions outnumber those short by 2.4 to 1; 71% of open positions are long. Such one-sided sentiment can sometimes coincide with important turns in price, but sentiment and price extremes are only clear in hindsight. Until we see a substantive shift we’ll remain in favor of selling into GBP declines.
See next currency section: USDJPY - US Dollar Remains Likely to Hold Support versus 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.