British Pound Sees Extreme Sentiment Losses Remain Likely
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GBPUSD – Retail forex traders have bought aggressively into British Pound declines versus the US Dollar, and indeed our data shows that positioning is at its most extreme since the GBP/USD set key lows near $1.46 in April.
The number of open long positions outnumber those short by a substantial 3.1 to 1; 76% of open positions are long. Such one-sided sentiment can often indicate that price may be near an important extreme. Yet it’s critical to note that such extremes are only clear in hindsight. Until we see a substantive turn in price and positioning we see scope for continued GBP/USD declines.
See next currency section: USDJPY - US Dollar Positioning Warns of Risks 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.