Net-Short Positions Set Up Bullish Trading Bias for Pound
GBPUSD: Retail trader data shows 39.7% of traders are net-long with the ratio of traders short to long at 1.52 to 1. In fact, traders have remained net-short since Nov 21 when GBPUSD traded near 1.3314; price has moved 1.5% higher since then. The number of traders net-long is 18.8% lower than yesterday and 18.8% lower from last week, while the number of traders net-short is 5.0% lower than yesterday and 14.7% 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.
--- Written by Dylan Jusino, DailyFX Research
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