GBPUSD – Retail FX traders are near their most short the British Pound against the US Dollar since it set its $1.6150, and extremely low volatility prices suggest the GBPUSD will fail at major peaks.
Trade Implications – GBPUSD: Our sentiment-based trading strategies have done especially well buying GBP as crowds sell, but future performance could suffer as our data shows most traders have done well in low-volatility conditions.
We would rather play the probabilities here: forex volatility prices are near year-to-date lows, and we put low odds on a major GBPUSD break higher. This runs counter to our typical view of retail trader sentiment, but we prefer joining the crowd and selling against the GBPUSD highs.
— Written by David Rodriguez, Quantitative Strategist for DailyFX.com
Automate our SSI-based trading strategies via Mirror Trader free of charge
To receive the Speculative Sentiment Index and other reports from this author via e-mail, sign up for his distribution list via this link.
Contact David via
Twitter at https://www.twitter.com/DRodriguezFX
Facebook at https://www.Facebook.com/DRodriguezFX