British Pound Remains a Sell until this Changes
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GBPUSD – Retail FX traders remain extremely long the British Pound versus the US Dollar, and a contrarian view of ‘crowd’ sentiment leaves us firmly in favor of selling into weakness. Indeed, our data shows the majority of traders most recently turned net-long GBP/USD as it traded below $1.3250 through mid-September. Taking the opposite view of what ‘the crowd’ is doing won’t always work this well, but the GBP has fallen by over 1100 points since the SSI turned net-long.
As long as traders continue to buy we see little reason to change our long-standing bearish trading bias.
--- Written by David Rodriguez, Senior Strategist for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.