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Major Shift Warns of Further British Pound Weakness

Major Shift Warns of Further British Pound Weakness

David Rodriguez, Head of Product

Weekly Summary of Forex Trader Sentiment and Changes in Positioning

IG Client Sentiment data shows the majority of traders are now net-long the British Pound versus the US Dollar—breaking a two-month trend. A contrarian view of ‘crowd’ sentiment warns of declines.

If most traders are long we prefer to be short and vice-versa. And major GBP/USD tumbles following a shock-result in the UK Elections have been met with aggressive buying. It would take a fairly significant subsequent shift in the opposite direction to shift us from our short-term bearish GBP/USD price forecast.

See the links below for our sentiment-based forecasts for the British Pound as well as the Euro, Yen, Australian Dollar, Gold Price, and US S&P 500.

EURUSD - Our Euro Forecast may Shift as Traders Show Change of Heart

GBPUSD - British Pound Forecast to Continue Lower on Key Shift

USDJPY - Japanese Yen Rally May be Overdone, but Trend Remains Clear

Spot Gold - Gold Price Outlook Unclear until this Changes

AUDUSD - Australian Dollar Forecast to Rally Further

S&P 500 - S&P Remains a Buy until this Changes

Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.

--- Written by David Rodriguez, Senior Strategist for DailyFX.com

Contact David via

Twitter at http://www.twitter.com/DRodriguezFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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