British Pound Outlook Clearly Points to further Declines
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GBPUSD– Aggressively one-sided forex trader positioning warns that the British Pound may continue lower against the US Dollar, and indeed our technical forecast warns that there may be further losses in store.
Our data shows there remain 2.6 open long positions in the GBP/USD for every one short; a contrarian view of crowd sentiment leaves us bearish. The one clear caveat is that these episodes of heavily stretched positions can and have coincided with important price extremes—‘the crowd’ is often most long at the bottom. Yet this is only clear in hindsight, and we will remain bearish the GBP/USD until we see a material shift towards crowd selling.
See next currency section: USDCAD - Canadian Dollar Likely to Hit Fresh Lows until this Changes
--- 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.