Shift in Pound Sentiment Suggest Weakness May Continue
GBPUSD: Retail trader data shows 47.6% of traders are net-long with the ratio of traders short to long at 1.1 to 1. In fact, traders have remained net-short since Feb 13 when GBPUSD traded near 1.38482; price has moved 0.7% higher since then. The number of traders net-long is 2.4% lower than yesterday and 8.0% lower from last week, while the number of traders net-short is 4.4% lower than yesterday and 13.1% 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.
--- Written by Dylan Jusino, DailyFX Research
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