British Pound on Verge of Major Reversal
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GBPUSD– An aggressive shift in retail FX trader sentiment warns that the British Pound may be at the cusp of a major reversal higher. Our data shows the majority of traders have remained long the GBP/USD since it traded above $1.50 through November of last year. Yet many of the same retail speculators are quite nearly net-short the GBP; this marks a substantive shift in sentiment.
It is of course possible that our Speculative Sentiment Index will not flip direction and the GBP/USD will instead continue in its much broader downtrend. The larger US Dollar sell-off nonetheless suggests that traders should watch for near-term GBP/USD gains.
See next currency section: AUDUSD - Australian Dollar Forecast to Gain Further
--- 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.