GBP/USD: Pound outperforms against the FX majors as UK leaves the EU
Focus shifts to transition period in the mid-term, and PMIs in the short-term.
GBP/USD Technical analysis, overview, strategies, and levels
With the UK formally leaving the EU and the Bank of England opting to keep monetary policy on hold, the pound was the top performer late last week against the remaining FX majors, and outperformed for the week as well. Given the transition period begins with the EU, the focus over the mid-term will be over negotiations between the two sides, but for this week it’ll be its manufacturing PMI (Purchasing Managers Index) expected to show ongoing slight contraction following nine months of sub-50 readings. Fundamentals were a bigger factor, but the technical overview on the weekly remains a stalling bull trend, and on the daily showing positive technical bias.
IG client* and CoT sentiment for GBP/USD
As with EUR/USD, long positions had a chance to unwind and push long bias 9% lower to a more moderate 58%, identical with that of larger speculative traders according to the latest CoT (Commitment of Traders) report where the bias there also dropped, by 4% on a reduction in pound long positions by 2,369 lots and a simultaneous increase in pound short positions by 4,864 lots.
GBP/USD Chart with retail and institutional sentiment
* The percentage of IG client accounts with positions in this market that are currently long or short. Calculated to the nearest 1%.
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