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British Pound Rally at Risk but We’re Not Selling Yet

ssi_gbp-usd_body_Picture_2.png, British Pound Rally at Risk but Were Not Selling Yet

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GBPUSDRetail forex crowds continue selling aggressively into British Pound strength, and one-sided sentiment warns that further GBPUSD gains are likely.

Trade Implications – GBPUSD: Our purely sentiment-based Momentum2 strategy has done well going against the crowd, and indeed the strategy recently closed a GBPUSD-long position at a modest gain.

The key risk to the British Pound is that it could continue to fail near significant multi-year range highs. We would nonetheless wait for a substantive shift in retail positioning before getting short.

Written by David Rodriguez, Quantitative Strategist for DailyFX.com

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