British Pound Headed for Rally on Net-Short Positions
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GBPUSD: Retail trader data shows 42.2% of traders are net-long with the ratio of traders short to long at 1.37 to 1. In fact, traders have remained net-short since Apr 12 when GBPUSD traded near 1.24863; price has moved 3.7% higher since then. The number of traders net-long is 8.6% lower than yesterday and 5.9% lower from last week, while the number of traders net-short is 3.0% lower than yesterday and 1.9% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBPUSD prices may continue to rise. Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger GBPUSD-bullish contrarian trading bias.
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