GBPUSD – Retail FX traders are now their most aggressively net-short the British Pound against the US Dollar (ticker: USDOLLAR) since it last traded at $1.63 in May, and our contrarian trading strategies have continued to buy into GBPUSD gains.
There is always risk that such one-sided sentiment may represent an important sentiment extreme and potential turning point. Yet major tops or bottoms are only clear in hindsight, and indeed the British Pound’s break above key resistance leaves further highs as near-term targets.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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