DY: British Pound’s Break Higher Shows Promise, We Like Buying
GBPUSD – Retail forex trading crowds have become aggressively short the British Pound against the US Dollar (ticker: USDOLLAR) as GBPUSD short orders have surged by 158 percent since last week.
Trade Implications – GBPUSD: Our sentiment-based trading strategies were short GBPUSD as recently as last week, but the impressive shift in crowd sentiment forced our Momentum2 strategy to go long from $1.5192 and more recently from $1.5405.
As with the Euro/US Dollar, our technical forecast first called for a GBPUSD-long position on a break of key resistance 7 days ago. Our GBP trading bias could shift if it falls below Monday’s low at $1.5235, but we favor a move towards key resistance towards $1.5415-1.5500 and sentiment lines up well with our technical bias.
