Today GBP/USD Market Update

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Cable has been under pressure over the last months from both a strong US dollar and a weak British Pound. From an early-June high of 1.4249, cable has been stuck in a well-defined downtrend with lower highs and lower lows dominating price action all the way down to 1.3162. GBP/USD currently trades around 1.3225 and is trying to build a base just above its recent multi-month low. With a raft of important macro events ahead this week, this may prove difficult. However, if the BoE decides to hike rates on Thursday, this will send Sterling popping higher towards a short-term target zone of 1.3350-1.3400.

Retail trader data show 72.03% of traders are net-long with the ratio of traders long to short at 2.58 to 1. The number of traders net-long is 3.21% higher than yesterday and 4.01% lower from last week, while the number of traders net-short is 2.96% higher than yesterday and 30.22% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests GBP/USD prices may continue to fall. Positioning is more net-long than yesterday but less net-long from last week. The combination of current sentiment and recent changes gives us a further mixed GBP/USD trading bias.