British Pound Stops and Reverses - Is it a True Breakdown?

DailyFX

View photo

.
ssi_gbp-usd_body_Picture_15.png, British Pound Stops and Reverses - Is it a True Breakdown?

GBPUSD – Retail forex trading crowds have grown net-long the British Pound against the US Dollar (ticker: USDOLLAR), and our sentiment-based trading strategies have gone in the opposite direction.

Trade Implications – GBPUSD: Choppy GBP price action has forced our purely SSI-driven Momentum2 to go both long and short within the past week with mixed results. Our Speculative Sentiment Index most often works as a contrarian indicator to price action in trending market conditions. Most retail traders tend to buy weakness and sell strength, and such a mean-reversion strategy will tend to do fairly well in range-bound markets.

Our Senior Technical Strategist believes that the GBPUSD may continue recent declines, but we will need to see considerable follow-through on the recent US Dollar bounce to maintain confidence in our GBPUSD-bearish bias.

--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com

Download all of our Sentiment-based trading strategies free via an ongoing promo on FXCMApps.com

To receive the Speculative Sentiment Index and other reports from this author via e-mail, sign up for his distribution list via this link.

ssi_gbp-usd_body_1a_1.png, British Pound Stops and Reverses - Is it a True Breakdown?

View how to automate the high-volatility Breakout2 Trading System via our previous article and webinar recording.

Auto trade the trend reversal-trading Momentum2system via our previous article and webinar recording.

Trade with strong trends via our Momentum1 Trading System and view an archived webinar

Use our counter-trend Range2 Trading system and view an archived webinar guide on automation

New to FX markets? Learn more in our video trading guide.

Contact David via

Twitter at http://www.twitter.com/DRodriguezFX

Facebook at http://www.Facebook.com/DRodriguezFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.

Rates

View Comments (0)