GBP/USD: Old fears of hard Brexit vs. soft Brexit resurface
Technical overview of a bull trend less relevant in the face of fundamental factors.
GBP/USD Technical analysis, overview, strategies, and levels
It's been a busy start to the week for the pound, given parliamentary elections last week, and where preliminary manufacturing and services PMI (Purchasing Managers Index) figures for the UK came in at a worse than expected – and contracting – 47.4 and 49 respectively, and following last month's slight contractions for both sectors. We've got more fundamental data in the wings for the pound, as UK employment figures are up next today, followed by CPI (Consumer Price Index) tomorrow, and the BoE (Bank of England) on Thursday. Expect soft vs. hard Brexit news to keep the pound volatility, and hence contrarian breakout strategies can’t be ruled out.
IG client and CoT sentiment for GBP/USD
As for sentiment, some fresh retail shorts were enticed into closing out on the retracement, with majority long bias amongst retail traders exactly opposite that of last Friday’s CoT (Commitment of Traders) report standing at a majority short 59%.
GBP/USD Chart with retail and institutional sentiment
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