GBPUSD – The British Pound looks to continue its recent recovery on broader US Dollar weakness; a contrarian view of retail forex crowd sentiment leaves us bullish GBPUSD.
Trade Implications – GBPUSD: Retail forex traders have sold aggressively into recent GBP strength—short interest is a massive 92 percent above levels seen last week. It’s admittedly difficult to get enthusiastic about buying one of the worst-performing currencies year-to-date, but we don’t like second-guessing our sentiment-based trading strategies as a sharp jump in forex volatility prices leaves them in a good position to do well. We like going against the retail trading crowd and buying into GBP strength.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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