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GBPUSD– Retail FX traders are once again net-short the British Pound versus the US Dollar, and a contrarian view of ‘crowd’ sentiment points to further British Pound strength. We’re admittedly left in somewhat of a difficult position; the recent shift is not enough to completely change our longer-term bearish bias. Yet a rally above key resistance at $1.3357 would act as confirmation of a bigger trend turnaround.
It was just a week ago we made much the same claim and yet the GBP turned lower, and we can’t rule out a similar fake-out this time around. We would ideally see a more sustained break higher and consistent retail FX crowd selling in order to call for a true GBP/USD trend change.
See next currency section: USDJPY - US Dollar Shows Signs of Life versus Yen
--- Written by David Rodriguez, Senior Strategist for DailyFX.com
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