British Pound Breakdown Might be the Real Deal
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GBPUSD – A noteworthy pullback in the British Pound has been met with a potentially significant shift in crowd positions. We might soon turn in favor of selling into GBPUSD losses.
Trade Implications – GBPUSD: We have mostly called for Sterling gains as a contrarian view of retail FX positions favored GBP rallies; the majority of traders have remained short since it traded above $1.55 through early 2013. Yet open long positions have surged 55 percent since last week, while short positions have fallen 33 percent.
We might be at an important inflection point for the Sterling, and a sustained move below $1.70 would leave us in favor of selling any short-term rallies.
See next currency section:USDJPY - Data Accurately Predicted USDJPY Bounce, Now What?
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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