GBP/USD: Volatility this morning on trade talk confusion
CBI’s reading negative again, preliminary PMIs up next.
GBP/USD Technical analysis, overview, strategies, and levels
With risk-related currencies outperforming yesterday (and partially recovering this morning after the confusion over whether the US-China trade deal was over), the pound outperformed against most of the FX majors, and bested the greenback for a finish above its 50-day moving average and undoing losses suffered on Friday. CBI's (Confederation of British Industry) industrial orders were another big contraction, as British industrial output suffered its biggest quarterly fall on record during the three months to June. Up next we’ll get preliminary PMIs (Purchasing Managers Index) for both the UK and the US. From a technical standpoint, tempting as it may be to label the recent moves as more bearish on the Weekly and Daily chart, any further risk-on moves in the financial markets can easily cause contrarian strategies to outperform at the expense of conformist sell trades.
IG client* and CoT sentiment for GBP/USD
In sentiment, fresh longs were quick to close out, taking the bias from 61% to 56%.
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%, as of today morning 8am.
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