Recent Moves Confirm End to British Pound Downtrend
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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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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.