[B]GBP[/B][B]/USD Ratio: 1.21
[/B][B]Signal: Bearish[/B]
[B]Currency[/B] [B]Last Week[/B] [B]Present*[/B] [B]% Long[/B] [B]% Change in Positions Outstanding[/B] [B]Signal[/B] GBPUSD 2.13 [B]1.21[/B] 55% -3.69% Bearish
[B]GBPUSD – [/B]Our previous Speculative Sentiment Index report was similarly prescient in predicting a GBPUSD breakdown, as FXCM forex traders had reached their most extreme in net-long positions in at least 2 years. Yet buying pressures have since moderated, and the GBPUSD SSI ratio currently stands at a much more neutral 1.21 as 55 percent of traders are currently long the currency pair. Typically the SSI gives its strongest signal to go long or short a given currency pair when the ratio is above 2.00 or below -2.00, and the virtually neutral reading presently indicates that we may see Rangebound price action in the days ahead. In detail, long positions are 18.4% lower than yesterday and 54.6% stronger since last week. Short positions are 7.5% higher than yesterday and 33.8% weaker since last week. Open interest is 8.4% weaker than yesterday and 8.2% below its monthly average. The SSI is a contrarian indicator and continues to signal medium term declines in the GBPUSD, but selling pressure is likely to dissipate until we see more extremes in our forex positioning SSI ratio. Our technical forecast for the GBPUSD is almost entirely consistent with this assessment.