GBP/USD sentiment shift helps bullish case
Cable is on the rise as traders are fading the break higher; this may bode well for higher prices in the days ahead.
GBP/USD sentiment, price, and analysis
- GBP/USD trading at its best levels since early June
- Client position changes supportive of further gains
The British pound is rallying versus the US dollar, and with broad USD weakness becoming a central theme we may see further upside in GBP/USD in the days ahead. Recent changes in trader positioning data further backs the notion a breakout may be sustainable.
GBP/USD IG Client Sentiment
The IG Client Sentiment index (IGCS) show retail traders selling into multi-week highs, with only 41.55% net-long. The number of traders net-long is 6.60% lower than yesterday and 6.37% lower from last week, while the number of traders net-short is 28.14% higher than yesterday and 9.40% higher from last week. This suggests that traders aren’t so much lessening their long positions but outright shorting the pair.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short and increasing these bets suggests GBP/USD prices may continue to rise.
Find out more about forex trading
GBP/USD IGCS Chart
GBP/USD technical outlook
Supporting the sentiment outlook is the fact that cable is trading at its best levels since the early part of June. It is also trying to cross above the 200-day moving average (MA), a threshold it has struggled with on a few occasions since April. A daily close above the long-term moving average could quickly lead to a rise to the June high at 12,813, where we will have to evaluate whether it will take out resistance (strong momentum) or turn back lower again (weakening momentum).
GBP/USD daily chart
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Start trading forex today
Trade the largest and most volatile financial market in the world.
- Spreads start at just 0.6 points on EUR/USD
- Analyse market movements with our essential selection of charts
- Speculate from a range of platforms, including on mobile
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.
