British Pound at Risk of Turnaround versus US Dollar
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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.