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British Pound Likely to Head Higher before it Drops

British Pound Likely to Head Higher before it Drops

David Rodriguez, Head of Product
British Pound Likely to Head Higher before it Drops

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GBPUSD– Retail FX traders remain long the British Pound versus the US Dollar, and a contrarian view of crowd sentiment warns the GBP/USD may continue lower. A key caveat is that we have most recently seen traders selling into rallies—total short interest has surged by 92 percent in the past seven days.

The remarkable shift in GBP short positions warns that we may be in the midst of a short-term turnaround. The dramatic post-Brexit drop in the GBP/USD keeps our broader focus to the downside. Yet it seems as though the pair may continue its correction higher—giving us pause before any near-term selling.

See next currency section: USDJPY - Japanese Yen Could Fall even Further

--- Written by David Rodriguez, Senior 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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