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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

GBP/USD: Pound underperforms, price back below 50-day MA

Retail long bias surges back up as conformist strategies get tested.

GBP Source: Bloomberg

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

The pound was the worst performer yesterday amongst the FX majors, and hence GBP/USD's price registered a big plummet back below its 50-day moving average (and hence back below all its main long-term moving averages) that broke below yesterday's 1st Support level offering only a small reversal opportunity and overall aiding contrarian breakouts more. Most of its main technical indicators remain neutral with a non-trending ADX (Average Directional Movement Index), though a positive DMI (Directional Movement Index) cross occurred yesterday. Light data out of the UK both today and tomorrow means attention will likely be on significant US data released later today and its affect on the US dollar, as well as any risk-related items.

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GBPUSD TA Source: IG charts

IG client* and CoT sentiment for GBP/USD

Retail long bias has risen significantly on yesterday's move, rising closer to heavy buy territory.

GBPUSD sentiment Source: IG charts

GBP/USD Chart with retail and institutional sentiment

The latest moves have been in favor of majority long retail traders, whose long bias has dropped to just 54% as of this morning. Larger speculative traders according to the latest CoT (Commitment of Traders) report remain majority short, with the increase in pound long positions by 4,285 lots outdone by a larger increase in short positions by 9,586 lots.

GBPUSD chart Source: IG charts

*The percentage of IG client accounts with positions in this market that are currently long or short. Calculated to the nearest 1%, as of today morning 8am.

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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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