Pound May Weaken Against the Dollar
GBPUSD: Retail trader data shows 37.1% of traders are net-long with the ratio of traders short to long at 1.69 to 1. In fact, traders have remained net-short since Dec 28 when GBPUSD traded near 1.33553; price has moved 6.8% higher since then. The number of traders net-long is 1.6% lower than yesterday and 2.9% higher from last week, while the number of traders net-short is 11.9% lower than yesterday and 0.1% higher 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.
--- Written by Dylan Jusino, DailyFX Research
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