British Pound Downtrend May Finally be Over
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GBPUSD – Retail FX traders have recently sold into British Pound gains versus the US Dollar, and a contrarian view of crowd sentiment suggests the GBP/USD could continue onto fresh highs. Indeed, our data shows the majority of retail open positions have remained net-long the GBP with virtually no interruption for five months.
The Sterling has fallen from $1.53 to lows near $1.38 through that stretch, but the sudden flip in direction warns the GBP/USD downtrend may slow or even reverse. A sustained shift to net-selling would help confirm a change in trend and favor British Pound strength.
See next currency section: USDJPY - US Dollar to Fall Further versus Japanese 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.