RETAIL TRADERS CONTINUE TO HOLD NET-LONG POSITIONS
GBPUSD: Retail trader data shows 62.0% of traders are net-long with the ratio of traders long to short at 1.63 to 1. In fact, traders have remained net-long since Sep 20 when GBPUSD traded near 1.29279; price has moved 2.3% lower since then. The number of traders net-long is 4.1% lower than yesterday and 20.6% lower from last week, while the number of traders net-short is 5.0% higher than yesterday and 19.0% higher from last week.
GBPUSD PRICES MAY RISE REGARDLESS OF TRADERS REMAING NET-LONG
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 Nancy Pakbaz, CFA, DailyFX Research