GBP/USD: Pound outperforms on latest election polls, retail and institutional bias still majority short

UK services PMI better than expected, though its Brexit updates that aids underlying volatility in GBP/USD.

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

When it comes to the FX majors’ performance, both pound and CAD outperformed in yesterday’s session, the former aided by the latest polls showing the Conservative Party’s lead extending ahead of next week’s elections, and in the process reducing the likelihood of a hung parliament that would in turn risk keeping Brexit in play. From a technical standpoint – and the recent moves have been more fundamentally driven – more positive bias is starting to form on the daily (and weekly) with its price well above all its main moving averages, a positive DMI (Directional Movement Index), but a non-trending ADX (Average Directional Index), with little needed at this stage to shift to an initializing bull trend.

IG client and CoT sentiment for GBP/USD

In sentiment however, both retail and institutional traders are holding a majority short bias, the former reducing it a notch at 54% while CoT (Commitment of Traders) majority short bias (as per the last Friday’s report) has risen 2% to a heavy short 66% on an increase in pound short positioning by 4,114 lots and a simultaneous reduction in pound longs by 559 lots.

GBP/USD Chart with retail and institutional sentiment

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