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Recent Moves Confirm End to British Pound Downtrend

Recent Moves Confirm End to British Pound Downtrend

2016-04-28 16:15:00
David Rodriguez, Head of Product
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Recent Moves Confirm End to British Pound Downtrend

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

GBPUSD– Retail FX traders recently turned net-short the British Pound versus the US Dollar, and a contrarian view of crowd sentiment leaves us in favor of buying into recent strength. Last week we warned that a substantive shift in trader positioning warned of a similarly significant change in trend. And indeed recent moves act as confirmation of the same.

Our data shows traders remained net-long GBP/USD as it fell from $1.53 to lows near $1.38, but as of this week we see the opposite as traders are short. Past performance is not indicative of future results, but we believe going against the crowd may work well as we watch for further Sterling strength.

See next currency section: USDJPY - US Dollar Forecast to Fall Further versus Yen

--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com

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Contact David via Twitter at http://www.twitter.com/DRodriguezFX

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

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