Receive the Weekly Speculative Sentiment Index report via PDF via David’s e-mail distribution list.
GBPUSD – Retail FX traders recently hit their most short GBPUSD on record, and a substantial swing in crowd sentiment warns that the GBP has set an important top.
Trade Implications – GBPUSD: FXCM SSI data showed that the ratio of open short positions to long positions in GBPUSD hit a remarkable 9.2 to 1 as it traded to multi-year highs. Yet long positions have since surged by 95 percent while short positions have fallen 20 percent.
Our purely sentiment-based Momentum2 trading strategy has done well buying into Sterling gains. Yet the sharp swing in positions means it is quite close to getting short. A daily key reversal likewise suggests the next move in GBPUSD will be lower.
--- 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