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GBPUSD – Retail traders are near their most net-long the British Pound versus the US Dollar in over a year, and heavily one-sided sentiment leaves us in favor of continued GBPUSD losses.
Trade Implications – GBPUSD: The majority of traders turned net-long GBPUSD as it traded below $1.70, and this was especially significant given that traders had remained short since it crossed above $1.55. There’s no way to know whether this flip in positioning will lead a move of the same magnitude, and downside momentum seems stretched in the very short term. Yet remaining below $1.70 keeps our focus on trading towards key lows near $1.67.
See next currency section:USDJPY - US Dollar Likely to Remain Capped versus Yen
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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