GBP/USD: Breakout strategies outperform last week as upside move undone
Withdrawal bill passes in parliament on Friday, while in sentiment CoT bias on the verge of shifting
GBP/USD Technical analysis, overview, strategies, and levels
There were a few items late last week of interest out of the UK, including Friday’s Brexit vote in parliament that passed and leaving the UK on course to leave the EU by the end of next month. GDP (Gross Domestic Product) figures were better than expected at 0.4% for the quarter, retail sales contracted, and the BoE (Bank of England) opted to keep rates on hold at 0.75% but where two members continued to vote for a rate cut against the remaining seven. Last week’s breakout volatility strategies were in line with its volatile technical state where although the bulk of its main technical indicators are bullish, the gains towards 1.35+ have easily been at risk of being undone, and hence a sell breakout off of last week’s weekly 1st Support level panned out, with GBP/USD’s price crossing below both the 200-week and 100-week moving averages.
IG client and CoT sentiment for GBP/USD
In sentiment, retail long bias jumped to a majority long 72% from 57% at the start of last week, while CoT (Commitment of Traders) bias amongst larger speculative traders is on the verge of shifting to majority long for the first time since April. Pound long positions rose by 7,391 lots while short positions were reduced by 9,468 lots.
GBP/USD Chart with retail and institutional sentiment
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