CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

GBP/USD: Overview remains volatile as gains swiftly undone

Breakout strategies have outperformed as of late given increased volatility.

GBP/USD Technical analysis, overview, strategies, and levels

For GBP/USD, it was a sixth consecutive day of losses that took its price below its 50-day moving average and caused a negative DMI (Directional Movement Index) cross. A swift undoing of recent gains then, and one that has kept its outlook more volatile in both the short and mid-term aiding volatile breakout strategies over contrarian fading and reversals. The economic calendar is light and will remain so as the holidays approach, and hence liquidity will be low and at risk of volatile movement should a major buyer (or seller) enter the market.

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IG client and CoT sentiment for GBP/USD

In sentiment, while CoT (Commitment of Traders) bias amongst larger speculative traders is on the verge of shifting to majority long, retail trader bias is already there at a heavy long 70%, dropping slightly from yesterday’s 72% as longs initiated at the 1.30-1.35 region get squeezed.

GBP/USD Chart with retail and institutional sentiment

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This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. 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. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

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