Retail FX Traders continue to buy aggressively into British Pound weakness against the resurgent US Dollar (ticker: USDOLLAR), and one-sided sentiment gives consistent signal that the British Pound/US Dollar exchange rate may fall to fresh lows.
Our proprietary Speculative Sentiment Index data shows that there are currently 1.76 traders long for every short, and sentiment is at its most extremely net-long since the second week of June. Long interest has grown 8 percent since last week while shorts are down 6 percent.
When crowds are net-long and continue buying, we most often look for further currency weakness. Our technical GBPUSD forecast likewise calls for weakness as long as price remains below the $1.5777 mark.
How do we interpret and trade with the SSI? Watch an FXCM Expo Presentation that explains the SSI.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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