British Pound Sentiment Shows Early Signs of Turnaround
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GBPUSD: Retail trader data shows 69.1% of traders are net-long with the ratio of traders long to short at 2.23 to 1. In fact, traders have remained net-long since Feb 24 when GBPUSD traded near 1.25537; price has moved 3.2% lower since then. The percentage of traders net-long is now its lowest since Mar 07 when GBPUSD traded near 1.22026. The number of traders net-long is 6.6% lower than yesterday and 4.7% lower from last week, while the number of traders net-short is 29.2% higher than yesterday and 7.3% higher from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests GBPUSD prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current GBPUSD price trend may soon reverse higher despite the fact traders remain net-long.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.