GBP/USD: Surprise BoE rate cut and rise in asset purchases
Short positions in the pound surge, but retail and institutional traders remain majority long.
GBP/USD Technical analysis, overview, strategies, and levels
Conformist volatility breakout strategies were also big beneficiaries last week, with its price crashing well past last week's Weekly Support levels even if its price spiked higher on Friday (which more than aided conformist breakout strategies for daily levels as well as per last Thursday's Daily Market Report). Thursday's late surprise Bank of England rate cut took its key interest rate down to 0.1%, and the central bank also opted to raise asset purchases to ₤645bn. From a technical standpoint – and it remains volatile despite temptations to label it a bear trend – all its main technical indicators are flashing red, and a negative DMI (Directional Movement Index) cross occurred last week.
IG client* and CoT sentiment for GBP/USD
In sentiment, both retail and CoT (Commitment of Traders’ larger speculative) traders are majority long, the latter reducing their long bias by 5% on an 8,186 lot increase in short positions as opposed to a 498 lot increase in pound longs.
GBP/USD Chart with retail and institutional sentiment
*The percentage of IG client accounts with positions in this market that are currently long or short. Calculated to the nearest 1%, as of today morning 8am.
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