Major Shift Warns of Further British Pound Weakness

Weekly Summary of Forex Trader Sentiment and Changes in Positioning

IG Client Sentiment data shows the majority of traders are now net-long the British Pound versus the US Dollar—breaking a two-month trend. A contrarian view of ‘crowd’ sentiment warns of declines.

If most traders are long we prefer to be short and vice-versa. And major GBP/USD tumbles following a shock-result in the UK Elections have been met with aggressive buying. It would take a fairly significant subsequent shift in the opposite direction to shift us from our short-term bearish GBP/USD price forecast.

See the links below for our sentiment-based forecasts for the British Pound as well as the Euro, Yen, Australian Dollar, Gold Price, and US S&P 500.

EURUSD – Euro Traders Once Again Sell – We Prefer to Buy

GBPUSD – British Pound Forecast Hinges on the Crowd’s Next Move

USDJPY – US Dollar Likely to Fall even Further versus Japanese Yen

Gold Price – Looks Likely to Rally Further

AUDUSD – Australian Dollar Outlook Unclear until this Changes

S&P 500 – Forecast Shifts Sharply as Traders Change Direction

Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.

Written by David Rodriguez, Senior Strategist for DailyFX.com

Contact David via

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

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