GBP/USD: 4-Month Extreme in Long Positions Prompt a Bullish Bias
Net-Short Positions Jump 9.7% This Week
GBPUSD: Retail trader data shows 63.1% of traders are net-long with the ratio of traders long to short at 1.71 to 1. In fact, traders have remained net-long since Apr 20 when GBPUSD traded near 1.40186; price has moved 7.3% lower since then. The percentage of traders net-long is now its lowest since Jul 22 when GBPUSD traded near 1.31392. The number of traders net-long is 8.9% lower than yesterday and 4.3% lower from last week, while the number of traders net-short is 1.8% lower than yesterday and 9.7% higher from last week.
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Decreasing Net-Long Positions Suggest Prices May Climb Higher
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests GBPUSD prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current GBPUSD price trend may soon reverse higher despite the fact traders remain net-long.
--- Written by Jake Schoenleb, DailyFX Research
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.