CFDs are complex instruments. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money. CFDs are complex instruments. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.

GBP/USD rate outlook bearish on rising net-long bets

The British pound may fall against the US dollar on rising net-long bets after GBP/USD left behind a couple of bearish technical signals after March's highs held.

British pound IG client sentiment - talking points

  • British pound may fall on rising net-long bets
  • GBP/USD at risk to bearish technical signals
  • Highs from March eyed for uptrend resumption

GBP/USD IG client sentiment outlook

The British pound could be on the verge of reversing its dominant uptrend against the US dollar amid rising net-long positioning. From the beginning of September until 13 December, GBP/USD climbed over 10% as those betting on a continuation in trend shrunk. This took overall net-long positioning from about 75% to a low of roughly 40% during the same period, as reported via IG client sentiment.

On 18 December, retail trader data showed that about 65.17% of GBP/USD traders were net long. This was 11.73% and 60.61% higher over a daily and weekly period respectively. The combination of current sentiment and recent changes offers a stronger GBP/USD-bearish contrarian trading bias. From a psychological perspective, this could speak to more investors attempting to pick the next bottom.

Check out what forex trading is and how it works

GBP/USD Client Positioning

British pound technical analysis

Accompanying the sentiment outlook are more signs of a top in the British pound from a technical perspective. Prices struggled to break above a descending trend line from June 2015, leaving behind a shadow. This is as highs from March held, reinforcing key resistance as a range between 1.3304 and 1.3381. Now, GBP/USD is attempting to confirm a daily close under near-term rising support from October.

The pair has also left behind an Evening Star candlestick pattern which carries bearish implications. A continuation of near-term weakness places the focus on former resistance which may stand in the way as support at 1.2950 to 1.3013. Taking this barrier out then exposes a potential rising support line from September. Otherwise, turning higher places the focus on 1.3177 before revisiting early December highs.

Learn the basics and process of shorting forex and GBP/USD

GBP/USD Daily Chart

This information has been prepared by IG, a trading name of IG Markets 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.

Start trading forex today

Trade the largest and most volatile financial market in the world.

  • Spreads start at just 0.6 points on EUR/USD
  • Analyse market movements with our essential selection of charts
  • Speculate from a range of platforms, including on mobile

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.