British Pound Forecast to Break Key Lows
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GBPUSD– Retail FX traders have bought aggressively into recent British Pound declines versus the US Dollar, and a contrarian view of crowd sentiment leaves us in favor of doing the opposite and selling. This is admittedly in stark contrast to last week when we said almost the exact opposite, and indeed we were caught on the wrong side of a failed breakout.
The clear caveat is that choppy market conditions could keep the GBP/USD within its narrow month-to-date range. Failure to break below near-term support at the psychologically-significant $1.4000 mark would give us clear pause in our calls for selling into weakness.
See next currency section: NZDUSD - New Zealand Dollar Remains a Sell 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.