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British Pound Forecast Remains Firmly Bearish

British Pound Forecast Remains Firmly Bearish

David Rodriguez, Head of Product
British Pound Forecast Remains Firmly Bearish

Why and how do we use the SSI in trading? View our video and download the free indicator here

GBPUSD– Aggressively one-sided retail forex trader positioning warns that the British Pound will likely fall further versus the US Dollar. Last week we noted an aggressive turn in ‘crowd’ sentiment as a key reason the GBP/USD could weaken further, and indeed positions have only grown more extreme as the Sterling fell 200+ points versus the Greenback.

Our data now shows a remarkable 70 percent of open GBP/USD positions in our sample are long; a contrarian view leaves us firmly bearish. The only caveat is straightforward—retail positions are often at their most one-sided at major market turns. And indeed, our Speculative Sentiment Index shows the largest ‘crowd’ long position since the GBP/USD reversed higher off of $1.41 mark just one month ago.

Such extremes are only clear in hindsight, however; until we see concrete signs of a sentiment shift we will remain in favor of selling into GBP/USD weakness.

See next currency section:USDCAD - Canadian Dollar May Offer Selling Opportunity at Range Lows

--- Written by David Rodriguez, Quantitative Strategist for

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.