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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.

Market update: retail trader sentiment analysis with mixed outlook for FTSE, GBP/USD, and EUR/GBP

Gauge market dynamics by examining sentiment indicators, position ratios, price fluctuations, and technical signals to determine prevailing bullish or bearish trends.

Source: Adobe images

FTSE 100 mixed outlook

Analysis of retail trader positioning reveals a slight bearish tilt, with 48.54% of traders holding long positions and a short-to-long ratio of 1.06 to 1. While net-long positions have decreased marginally by 0.85% since yesterday, they have increased by 19.89% over the past week. Conversely, net-short positions have seen a minor 0.44% increase from yesterday but a 15.36% decrease compared to last week.

Given our contrarian approach to market sentiment, the net-short bias suggests the potential for continued Financial Times Stock Exchange (FTSE) 100 appreciation. However, the mixed short-term and medium-term positioning shifts indicate a nuanced trading outlook for the FTSE 100.

FTSE 100 client positioning chart

Source: TradingView

GBP/USD technincal analysis

Recent retail trader data indicates strong bearish sentiment, with only 35.60% of traders maintaining long positions and a short-to-long ratio of 1.81 to 1. Net-long positions have seen a slight 0.90% increase since yesterday and a substantial 29.32% rise over the week. Net-short positions show a minimal 0.28% decline from yesterday and a more significant 9.27% weekly decrease.

While our contrarian interpretation of crowd sentiment would typically suggest potential GBP/USD gains given the net-short position, the recent reduction in bearish positioning and increase in bullish sentiment warrant caution. These shifts in trader behavior suggest the current upward trend in GBP/USD may be approaching a reversal

GBP/USD client positioning chart

Source: TradingView

EUR/GBP technical analysis

Recent retail trader data indicates pronounced bullish sentiment, with 75.19% of traders maintaining long positions and a long-to-short ratio of 3.03 to 1. Net-long positions have seen a slight 0.62% increase since yesterday, but a 5.09% decrease over the week. Net-short positions show a 2.56% rise from yesterday and a more significant 12.68% weekly increase.

While our contrarian interpretation of crowd sentiment would typically suggest potential EUR/GBP losses given the net-long position, the recent growth in bearish positioning and decrease in bullish sentiment warrant caution. These shifts in trader behavior suggest the current downward trend in EUR/GBP may be approaching a reversal point.

EUR/GBP client positioning chart

Source: TradingView
  • This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. 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.

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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