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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 - Euro Traders Once Again Sell - We Prefer to Buy

GBPUSD - British Pound Forecast Hinges on the Crowd’s Next Move

USDJPY - US Dollar Likely to Fall even Further versus Japanese Yen

Gold Price - Looks Likely to Rally Further

AUDUSD - Australian Dollar Outlook Unclear until this Changes

S&P 500 - Forecast Shifts Sharply as Traders Change Direction

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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