British Pound Likely to Head Higher before it Drops
Why and how do we use the SSI in trading? View our video and download the free indicator here
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
To receive the Speculative Sentiment Index and other reports from this author via e-mail, sign up for his distribution list via this link.
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.