GBP/USD, GBP/JPY, EUR/GBP Positioning Alerts in Focus

British Pound, GBP/USD, GBP/JPY, EUR/GBP, Retail Dealer Positioning – Speaking Factors

  • Retail merchants are betting that the British Pound could strengthen
  • Contrarian indicators trace that GBP/USD, GBP/JPY could weaken
  • EUR/GBP could rise, are technicals aligning with positioning indicators?

Looking at IG Shopper Sentiment (IGCS), retail merchants have been more and more betting on British Pound appreciation. Upside publicity has been rising in GBP/USD and GBP/JPY, with brief publicity rising in EUR/GBP. At instances, IGCS is usually a contrarian indicator. If this pattern in positioning continues, then Sterling may depreciate as a substitute.

GBP/USD Sentiment Outlook – Bearish

The IGCS gauge implies that roughly 77.24% of retail merchants are net-long GBP/USD. Draw back publicity has decreased by 15.92% and 29.08% over a day by day and weekly foundation respectively. Because the majority of merchants are net-long, this implies costs could proceed falling. Current shifts in positioning are additional underscoring a stronger bearish-contrarian buying and selling bias.

British Pound Forecast: GBP/USD, GBP/JPY, EUR/GBP Positioning Signals in Focus

GBP/USD finds itself testing a key zone of help. This can be a mixture of the 61.8% Fibonacci retracement of the September 2020 – June 2021 transfer at 1.3278 and the ground of a Descending Broadening Wedge. Optimistic RSI divergence does present that draw back momentum is fading. As such, costs may bounce, putting the give attention to the 20- and 50-period Easy Transferring Averages. However, this will likely not spell the tip of Sterling’s dominant downtrend since earlier this 12 months.

GBP/USD Every day Chart

British Pound Forecast: GBP/USD, GBP/JPY, EUR/GBP Positioning Signals in Focus

Chart Created in Buying and selling View

GBP/JPY Sentiment Outlook – Bearish

The IGCS gauge exhibits that about 54% of retail merchants are net-long GBP/JPY. Draw back publicity has decreased by 11.18% and 30.77% over a day by day and weekly foundation respectively. Because the majority of retail merchants are net-long, this implies costs could proceed falling. Current shifts in positioning are additional underscoring a bearish-contrarian buying and selling bias.

British Pound Forecast: GBP/USD, GBP/JPY, EUR/GBP Positioning Signals in Focus

GBP/JPY could possibly be susceptible to a broader selloff after costs confirmed a breakout below a long-term rising trendline from 2020. This additionally follows a bearish crossover between the 20- and 50-period SMAs. Nonetheless, the important thing 148.463 – 149.352 help zone stays in play. This ground has held since March and will pivot costs larger as soon as once more. Confirming a breakout below the latter may trace at additional losses. In any other case, a push again above the SMAs could place the main target again on October highs.

GBP/JPY Every day Chart

British Pound Forecast: GBP/USD, GBP/JPY, EUR/GBP Positioning Signals in Focus

Chart Created in Buying and selling View

EUR/GBP Sentiment Outlook – Bullish

The IGCS gauge implies that roughly 59% of retail merchants are net-long EUR/GBP. Upside publicity has decreased by 14.77% and 34.40% over a day by day and weekly foundation respectively. Since most merchants are net-long, this hints costs could proceed falling. Nonetheless, latest shifts in positioning trace that the value pattern could quickly reverse larger.

British Pound Forecast: GBP/USD, GBP/JPY, EUR/GBP Positioning Signals in Focus

EUR/GBP stays in a broader downtrend since final 12 months, however draw back momentum has been significantly slowing all through 2021. Optimistic RSI divergence preceded the latest leg larger. Costs stay under the long-term 200-day SMA, which is sustaining the downtrend. As such, the pair may pivot again decrease within the occasion of a near-term climb. Resuming the downtrend entails a descent by means of 0.8373 in direction of lows from 2020. Speedy resistance appears to be at 0.8595.

EUR/GBP Every day Chart

British Pound Forecast: GBP/USD, GBP/JPY, EUR/GBP Positioning Signals in Focus

Chart Created in Buying and selling View

*IG Shopper Sentiment Charts and Positioning Knowledge Used from November 30th Report

— Written by Daniel Dubrovsky, Strategist for DailyFX.com

To contact Daniel, use the feedback part under or @ddubrovskyFX on Twitter




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