Watch Retail Sentiment on British Pound into Brexit Vote
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GBPUSD– Retail FX traders have bought aggressively into the British Pound’s recent slide versus the US Dollar, and a contrarian view of ‘crowd’ positioning acts as signal the GBP/USD may continue lower.
Our data shows traders remained net-long GBP/USD as it fell from $1.53 to lows near $1.38, but more recently we have seen periods in which traders turned net-short. If we nonetheless see a continued shift towards buying—much as we have this week—our sentiment indicator will keep us firmly in favor of selling the GBP/USD. It will be critical to watch Sterling price action headed into the highly-anticipated UK ‘Brexit’ vote, and we expect the GBP may remain volatile in the weeks ahead.
See next currency section: USDJPY - US Dollar Looks like a Sell 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.