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British Pound at Risk of Turnaround versus US Dollar

British Pound at Risk of Turnaround versus US Dollar

David Rodriguez, Head of Product
British Pound at Risk of Turnaround versus US Dollar

Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.

GBPUSD: Retail trader data shows 48.3% of traders are net-long with the ratio of traders short to long at 1.07 to 1. In fact, traders have remained net-short since Jun 23 when GBPUSD traded near 1.27385; price has moved 2.3% higher since then. And yet the percentage of traders net-long is now its highest since Jul 11 when GBPUSD traded near 1.28525.

The number of traders net-long rose 15.2% from yesterday and is 25.4% higher from last week, while the number of traders net-short is 8.3% higher than yesterday and 18.2% 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. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current GBPUSD price trend may soon reverse lower despite the fact traders remain net-short.

See next article in this week’s report:USDJPY - US Dollar Remains a Sell versus Japanese Yen

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.