Henordy Foreign Exchange

01/11/2020

https://www.youtube.com/watch?v=qloBJbbE6IQ

01/11/2020

24/10/2020

Pound Technical Analysis: GBP/USD Maintaining Bullish Structure

GBP/USD TECHNICAL OUTLOOK: BULLISH
Upward sloping channel keeps outlook neutral to bullish
It will require a breakdown out of the channel to flip the bias lower
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CABLE CHANNEL KEEPS IT POINTED HIGHER
GBP/USD experienced some nice strength next week, and on that it kept forging the bullish channel building over the past month. As long as it stays within its confines then the outlook will be neutral at worst, with more upside expected.

Within the top and bottom-side thresholds of the channel lies a parallel that has seen much play over the past month. It currently lies right around 13035, but moving higher of course. If price can stay above this line it will keep Cable in the middle to upper portion of the channel, which is considered its most bullish posturing.

If, however, we see the bottom of the channel brought into play, it doesn’t mean things are necessarily souring, but in fact could present a potentially good risk/reward opportunity for would-be longs to establish a position with a tight stop.

If we do see strength continue, and even accelerate, the mid-13300s up to 13500 will be a big area of resistance. In that vicinity lies a big horizontal level and a trend-line from 2007. Indeed a big macro spot to pay attention.

On the flip-side, should the lower parallel break, then a neutral to bearish outlook may be warranted. The first level of support to watch comes in around the 12860 area, with an even larger drop towards the September low under 12700 being the risk.

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GBP/USD 4-HR CHART (CHANNEL KEEPS THINGS NEUTRAL/BULLISH FOR NOW)
British Pound Price Chart
GBP/USD WEEKLY CHART (MID-13300S/13500 IS BIG RESISTANCE)
GBPUSD Weekly Price Chart
GBP/USD Charts by TradingView

24/10/2020

Gold Forecast: XAU/USD at the Mercy of a Fiscal Stimulus Deal

GOLD PRICE WEEKLY FUNDAMENTAL FORECAST: NEUTRAL
Gold outlook still hinges on stimulus deal expectations and corresponding swings in real yields
XAU/USD price volatility could persist as uncertainty surrounding fiscal aid and COVID-19 linger
Precious metals might stay supported more broadly as the Fed balance sheet hits all-time highs
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Gold price action fluctuated within a 2% range over the last five trading sessions only to finish flat on the week. The precious metal continues to seek a bullish catalyst to fuel a breakout from its consolidation pattern, and in light of murkiness surrounding fiscal stimulus negations, gold prices could keep drifting broadly sideways.

GOLD PRICE OUTLOOK HINGES ON INFLATION EXPECTATIONS (CHART 1)
Gold Price Chart Inflation Expectations
Despite the notable rise in US Treasury rates over the last several weeks, the price of gold has largely kept afloat thanks to climbing inflation expectations. In fact, the 5-year forward inflation swap rate has jumped to 2.19%, which marks a fresh post-crisis high, and helps keep pressure on real yields. Inflation expectations rising faster than interest rates causes real yields to move lower, which is a bullish fundamental driver for gold prices.

Inflation expectations have potential to gain further ground with the prospect of another comprehensive fiscal aid package before the November 2020 election in focus. If US politicians can strike a stimulus deal, gold prices could stage an explosive move higher with inflation expectations.

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Even if an agreement on stimulus cannot be reached prior to the election, inflation expectations could still stay relatively elevated if odds of a democratic sweep remain intact, as this would likely correspond with an even bigger stimulus deal early next year. That said, potential for a gridlocked congress could undermine inflation expectations and weigh negatively on gold price action.

GOLD PRICES SUPPORTED BY FED BALANCE SHEET GROWTH (CHART 2)
Gold Price Chart Fed Balance Sheet Total Assets
Resurfacing coronavirus concerns as new cases spike and governments reimpose restrictions on business activity presents another bearish threat to gold outlook. Yet, gold prices and inflation expectations could remain bolstered by Fed balance sheet growth. FOMC asset purchases have mounted and just pushed total assets held by the Federal Reserve to a new record high of $7.18-trillion.

Learn More - How to Trade Gold: Top Gold Trading Strategies & Tips

GOLD FUTURES PRICE WITH US DOLLAR INDEX OVERLAID (CHART 3)
XAU USD Price Chart Forecast Gold to US Dollar Index Correlation
Chart by created using TradingView

Explosive Fed balance sheet growth, which is expected to continue at the current pace according to recent commentary from Fed officials, underpins the anti-fiat narrative and investor demand for gold. Correspondingly, the direction of gold might mirror the US Dollar Index due to the strong inverse relationship generally maintained by the two safe-haven assets.

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Gold prices could spike higher with potential for the US Dollar to weaken further if fiscal stimulus optimism can outshine skepticism. XAU/USD could decline, however, if the US Dollar strengthens as coronavirus concerns take hold and inflation expectations gravitate lower.

24/10/2020

Australian Dollar Technical Forecast: AUD/USD, AUD/JPY, EUR/AUD, GBP/AUD

AUSTRALIAN DOLLAR, AUD/USD, AUD/JPY, EUR/AUD, GBP/AUD - TECHNICAL FORECAST
Australian Dollar faced selling pressure but held its ground
Bearish technical patterns in AUD/USD, AUD/JPY brewing
EUR/AUD and GBP/AUD struggled to maintain breakouts
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AUD/USD TECHNICAL FORECAST -NEUTRAL
The Australian Dollar is trading within a bearish Descending Triangle against the US Dollar. This also follows a bearish ‘Death Cross’ after the short-term 20-day Simple Moving Average (SMA) crossed under the medium-term 20-day one. However, AUD/USD remains in a consolidative mode given that the floor of the triangle is holding. A breach under support (0.7006-0.7043) would open the door to resuming August’s top. Otherwise, a push above the ceiling of the triangle brings the August high back into the crosshairs.

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AUD/USD DAILY CHART
AUDUSD Price Chart
AUD/USD Chart Created in TradingView

AUD/JPY TECHNICAL FORECAST - NEUTRAL
Against the Japanese Yen, the Australian Dollar is facing a similar technical scenario. AUD/JPY is trading within a Descending Triangle after a ‘Death Cross’ formed between the 50-day and 20-day SMAs. However, the floor of the triangle has held and a bounce could lead to a retest of falling resistance. Otherwise, a drop through support (73.98 – 74.25) could open the door to resuming the late-August top. That would subsequently place the focus on the next zone of support which is comprised of June lows.

{{SENTIMENT|AUD/JPY|What does this mean for the AUD/JPY outlook?}}
AUD/JPY DAILY CHART
AUDJPY Price Chart
AUD/JPY Chart Created in TradingView

EUR/AUD TECHNICAL FORECAST - NEUTRAL
The Euro pushed to its highest since May against the Australian Dollar this past week. However, EUR/AUD struggled to maintain the push above 1.6498 – 1.6590 after a bearish Dark Cloud Cover candlestick pattern formed. With that in mind, the breakout appears to have been false and has placed the focus on rising support from September. If it holds, that could reinstate the focus to the upside as prices attempted to push through the 1.6773 – 1.6893 barrier. Otherwise, further losses exposes 1.6308 on the way towards lows from June.

EUR/AUD DAILY CHART
EURAUD Chart
EUR/AUD Chart Created in TradingView

GBP/AUD TECHNICAL FORECAST - NEUTRAL
The British Pound appears to be struggling to maintain its push against the Australian Dollar. This past week, GBP/AUD touched its highest since late May before resistance (1.8527 – 1.8407) held. That has left the pair facing rising support from September which may reinstate the focus to the upside. Otherwise, further losses exposes the 1.7848 – 1.7966 support zone on the way towards September lows. Taking out immediate resistance on the other hand place the focus on the December 2019 low towards 1.8996.

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GBP/AUD DAILY CHART
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24/10/2020

Euro Forecast: ECB Meeting to Determine Next Major Move in EUR/USD

FUNDAMENTAL EURO FORECAST: NEUTRAL
The European Central Bank’s Governing Council meets this coming week and its statement Thursday, followed by its President’s news conference, will likely be important in determining the Euro’s direction over the next month or so.
The ECB will leave all its monetary settings unchanged but President Christine Lagarde could well start preparing the markets for a further easing of monetary policy in December.
Meanwhile, there are few signs of a breakout from the broad 1.16 to 1.20 range for EUR/USD that has confined the pair since mid-July.
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ECB MEETING CRITICAL FOR EUR/USD
The statement Thursday at the end of the next meeting of the European Central Bank’s Governing Council, and the subsequent comments by ECB President Christine Lagarde at her news conference, will be critical in determining the future direction of the Euro.

There will be no changes in interest rates or Eurozone monetary policy this coming week but Lagarde could hint at a further policy easing as early as December – a move that could weaken EUR/USD and the Euro crosses. The problem is that the Governing Council seems split on the issue.

Some members seem willing to act, fearing a “double dip” in the Eurozone economy as GDP falls again after a brief respite, hit by a second wave of Covid-19 infections that forces more countries and regions into lockdown. Easier monetary policy might help alleviate the resulting economic impact, help lessen deflationary pressures in the Eurozone and offset any damage to the region’s trade caused by the Euro’s advance since EUR/USD hit a low under 1.07 in March.

Others, though, seem more circumspect, worried that after hitting its highest level for more than a month last week EUR/USD may be vulnerable to a setback. There may also be concern about hinting at easier monetary policy so close to the US Presidential election and that more wary view seems to be that of the markets, where pricing suggests the rate on the ECB’s deposit facility will be minus 0.6% by the end of next year, only marginally below the current minus 0.5%.

You can find an FX traders’ guide to the ECB by clicking here

Putting all these factors together suggests that EUR/USD will continue to trade for a while yet in a broad range between the September 1 high at 1.2011 and the September 25 low at 1.1611.

EUR/USD PRICE CHART, DAILY TIMEFRAME (JULY 22 – OCTOBER 22, 2020)
EURUSD Price Chart
Source: Refinitiv (You can click on it for a larger image)

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WEEK AHEAD: DATA ALSO IMPORTANT FOR EUR/USD
Turning to the economic data on the calendar, the week ahead is a busy one, with German inflation and unemployment figures due Thursday, followed by Eurozone inflation and GDP numbers Friday. Both the German and the Eurozone price data could show steeper falls – emphasizing the ECB’s concerns about deflation – while the GDP data for the third quarter will likely show a strong rebound.

That would do little though to ease double dip concerns so more important might be Monday’s Ifo index of the German business climate in October, the first month of the fourth quarter, and it would be no surprise if that were weaker than in September.

20/10/2020

AUD/USD Downtrend to Accelerate? Election Betting Odds Defying Polls

2020 ELECTION, AUD/USD ANALYSIS, POLLING NUMBERS, BETTING ODDS - TALKING POINTS
Election polls show Biden ahead of Trump, but betting odds are show a slightly different narrative
Third presidential debate: what are the topics, where is it taking place and what time does it start?
AUD/USD downtrend may accelerate as area between descending resistance and support narrows
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15 DAYS UNTIL THE US PRESIDENTIAL ELECTION
It is almost two weeks until November 3, and polls continue to show Democratic nominee Joe Biden in the lead while incumbent President Donald Trump lags. Having said that, the race may be slightly closer than what the polls indicate as a result of what statisticians call “differential partisan non-response”. You can read more about it here and why markets may be caught off-guard.

2020 US Election Polls

Chart showing election 2020 polls
Source: RealClearPolitics

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In the same contrarian light, betting odds are showing a convergence after the Biden-Trump spread blasted to its widest difference on record between the two candidates. The key takeaway here is much like in 2016, despite what most polling stations say, there is still the possibility of another so-called “black swan” event. This is where a statistically improbable outcome – typically on the tail-end of a distribution curve – occurs.

2020 Election Betting Odds

Chart showing 2020 election
Source: RealClearPolitics

If Mr. Trump is re-elected, the political shockwave would likely catch markets off-guard, especially if they had positioned themselves with the expectation of Biden’s victory. As a result, the volatility that might ensue could stoke demand for havens like the US Dollar and put a discount on risk-anchored assets like the Australian Dollar and equities. Learn more about how markets might react to the election.

THIRD PRESIDENTIAL DEBATE – BUT ACTUALLY THE SECOND
The third presidential debate will be occurring on October 22 from 01:00-02:30 GMT at Belmont University in Nashville, Tennessee. Like the previous debate, it will be 90 minutes and uninterrupted by commercial breaks. Here are the following topics: Fighting COVID-19, American Families, Race in America, Climate Change National Security,and Leadership. The moderator will be NBC's Kristen Welker.

AUD/USD ANALYSIS
AUD/USD has been trading under the steep guidance of descending resistance and may soon enter what I call a compression zone. This is the area marked by a stubborn inflection point at 0.7018 and the slope of depreciation. Breaking above the latter could inspire additional follow through, resulting a short but aggressive buying burst.

AUD/USD - Daily Chart

Chart showing AUD/USD
AUD/USD chart created using TradingView

On the other hand, shattering 0.7018 might reinforce what appears to be a bearish disposition and could further accelerate the pair’s decline. In this scenario, selling pressure may start abating just before AUD/USD hits late-June support at 0.6829.

20/10/2020

Dow Jones Sinks, Hang Seng May Follow. ASX 200 Could Rise on Dovish RBA

DOW JONES, ASX 200, HANG SENG US FISCAL STIMULUS – ASIA PACIFIC INDICES BRIEFING
Dow Jones plunged alongside pre-election fiscal stimulus hopes
Hang Seng Index may follow the pessimistic lead on Wall Street
ASX 200 could rejoice as RBA reiterates recent dovish rhetoric
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Equities on Wall Street traded in the red on Monday, opening the door to setting a pessimistic tone in markets over the next 24 hours. The Dow Jones sank 1.44% in its worst day in almost one month. The tech-heavy Nasdaq 100 declined 1.65% and the S&P 500 dropped 1.63%. Weakness in equities could be traced to a decline in fiscal stimulus hopes from the world’s largest economy.

Speaker of the House Nancy Pelosi held talks with Treasury Secretary Steven Mnuchin, noting that they “continued to narrow their differences” over a relief package. The former set a deadline to reach an agreement with the White House by Tuesday. This is as President Donald Trump has said he is willing to match the $2.2 trillion bill that the Democrats have been leaning on.

Differences remain in the Republican-led upper chamber of Congress. Senate Majority Leader Mitch McConnell has opened the door to a targeted stimulus deal of around $500 billion. A vote on it is expected this week. However, the majority leader has continued to oppose going beyond the Republican-proposed $1.8 trillion package. Without the Senate’s support, the overall package may not pass before the election.

DOW JONES TECHNICAL ANALYSIS
Dow Jones futures could be at risk of turning lower. The index closed under a short-term rising trendline from the middle of September. However, confirmation is lacking. A further drop through the 28084 inflection zone could be that bearish signal. Otherwise, key immediate resistance to watch seems to be at 28846.

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DOW JONES FUTURES – DAILY CHART
Dow Jones Sinks, Hang Seng May Follow. ASX 200 Could Rise on Dovish RBA
Chart Created in TradingView

TUESDAY'S ASIA PACIFIC TRADING SESSION – ASX 200, HANG SENG, RBA
Asia Pacific equities could be looking at a pessimistic day ahead. The Hang Seng, Hong Kong’s benchmark stock index, could this revers gains from yesterday. Yet, traders ought to be mindful of breaking headlines around US fiscal stimulus talks that could shift in the short term, opening the door to volatility. S&P 500 futures are pointing higher which could dampen some of the anticipated losses in APAC stocks.

The ASX 200, Australia’s benchmark stock index, may even receive a boost following dovish commentary from the Reserve Bank of Australia (RBA). Assistant Governor Christopher Kent noted that “there is still room to compress short-term rates”. Minutes of the RBA’s October interest rate announcement showed that officials were assessing the effects of lower borrowing costs on confidence and savers.

ASX 200 TECHNICAL ANALYSIS
The ASX 200 is attempting to confirm a break above the 6198 – 6156 resistance zone. That would open the door to ending its consolidation since late May between support (5705 – 5773) and resistance. This subsequently exposes the former 6396 – 6475 support zone which could stand in the way as new resistance.

ASX 200 – DAILY CHART
Dow Jones Sinks, Hang Seng May Follow. ASX 200 Could Rise on Dovish RBA
Chart Created in TradingView

HANG SENG TECHNICAL ANALYSIS
The Hang Seng may fall after prices were unable to breach resistance at 24826. A turn lower from here places the focus on the 24121 inflection point towards upper support at 23483. Maintaining the overall downtrend appears to be falling resistance from early 2020. Pushing above this zone exposes the August high at 25847.

HANG SENG – DAILY CHART
Dow Jones Sinks, Hang Seng May Follow. ASX 200 Could Rise on Dovish RBA
Chart Created in TradingView

20/10/2020

New Zealand Dollar Outlook: NZD/USD, NZD/JPY Hinge on Inflation Data

NEW ZEALAND DOLLAR, NZD/USD, NZD/JPY, RESERVE BANK OF NEW ZEALAND, NZ Q3 INFLATION – TALKING POINTS:
Upcoming inflation data for the third-quarter may define the near-term outlook for the New Zealand Dollar
NZD/USD eyeing a push to support at the 100-DMA.
NZD/JPY rates coiling up ahead of key economic data release.
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UPCOMING INFLATION DATA TO DICTATE NZD
Upcoming inflation data will likely dictate the New Zealand Dollar’s ​​near term outlook, after a slew of better-than-expected economic releases call into question the need for further stimulus from an ultra-dovish Reserve Bank of New Zealand.

The RBNZ has stated that it is “actively preparing a package of additional monetary policy tools to use if needed [and] reaffirmed that a Funding for Lending Programme (FLP), a lower or negative OCR, purchases of foreign assets, and interest rate swaps remain under consideration".

Moreover, Governor Adrian Orr has stated that he would “prefer to be battling with the quality problem of re-containing high inflation than the real challenge of battling deflation”, adding that he has asked commercial banks to prepare for the implementation of a negative interest rate policy and that there is still “plenty of room” left in the central bank's quantitative easing (QE) program.

However, with Prime Minister Jacinda Ardern easing all coronavirus-enforced restrictions at the end of September and recent economic data showing the nation’s recovery is gathering momentum, the need for additional monetary support may not be as dire as previously thought.

New Zealand Dollar Outlook: NZD/USD, NZD/JPY Hinge on Inflation Data
DailyFX Economic Calendar

New Zealand’s services and manufacturing PMI indices both expanded, and business confidence rose to its highest levels since February of this year, in September.

Nevertheless, with Assistant Governor Christian Hawkesby confirming that the RBNZ is not playing a “game of bluff” when it comes to the implementation of negative rates, further easing looks increasingly likely in the near term.

To that end, upcoming inflation data may temper easing bets in the short-term and allow the New Zealand Dollar to move higher against its major counterparts, should third-quarter figures surprise to the upside.

Conversely, a disappointing release would likely justify the need for additional action from the RBNZ and in turn significantly undermine the local currency.

New Zealand Dollar Outlook: NZD/USD, NZD/JPY Hinge on Inflation Data
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NZD/USD DAILY CHART – EYEING TEST OF 100-DMA SUPPORT
From a technical perspective, the NZD/USD exchange rate could be at risk of extending its fall from the yearly high set in September (0.6798), as price slices through support at the trend-defining 50-day moving average (0.6612) and the RSI dips back below its neutral midpoint.

A near-term pullback to confluent support at the 100-DMA (0.6552) and uptrend extending from the June 22 swing-low (0.6383) looks likely in the coming days, if the psychologically imposing 0.6600 mark continues to stifle buying pressure.

On the other hand, a daily close back above the 21-DMA (0.6620) would probably generate a push to test the monthly high (0.6682), with a breach of resistance at the 0.6700 mark needed to carve a path to test the yearly high (0.6798).

New Zealand Dollar Outlook: NZD/USD, NZD/JPY Hinge on Inflation Data
NZD/USD daily chart created using TradingView

NZD/JPY DAILY CHART – COILING UP BELOW 50-DMA
NZD/JPY rates may also slip lower in the coming days, if the 21-MA (69.84) and 50-MA (69.91) continue to suppress bullish momentum.

The development of the RSI and MACD indicator hint at swelling selling pressure, as both oscillators track firmly below their respective neutral midpoints.

A daily close below the sentiment-defining 200-DMA (69.37) would probably ignite a push to test the August low (68.76) and Ascending Channel support, with a break below needed to invalidate the bullish continuation pattern and bring the June low (68.16 ) into focus.

On the contrary, a push back above the 50-MA (69.91) and downtrend extending from the September high (71.98) could ignite a more extensive recovery from the September low (68.63) and open the door to retest the August high (71.71) .

New Zealand Dollar Outlook: NZD/USD, NZD/JPY Hinge on Inflation Data
NZD/JPY daily chart created using TradingView

11/10/2020

Gold Price Forecast: XAU/USD Recovery Faces First Test

GOLD TECHNICAL PRICE OUTLOOK: XAU/USD WEEKLY TRADE LEVELS
Gold priceupdated technical trade levels - Weekly Chart
XAU/USD rebound now approaching multi-week downtrend resistance– 1932 critical
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Gold prices are poised to mark a second consecutive weekly advance with XAU/USD rallying more than 1.3% to trade at 1925 ahead of the New York close on Friday. The recent advance keep price within the confines of the broader August decline however and the focus is on a reaction just higher near downtrend resistance. These are the updated targets and invalidation levels that matter on the gold weekly charts. Review my latest Weekly Strategy Webinar for an in-depth breakdown of this gold technical setup and more.

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GOLD PRICE CHART - XAU/USD WEEKLY
Gold Price Chart Outlook XAU USD
Chart Prepared by Michael Boutros, Technical Strategist; Gold on Tradingview

Notes: In last month’s Gold Weekly PriceOutlook we noted that XAU/USD had, “broken lower and while the broader technical structure is constructive, the risk remains for a deeper correction before resumption… look for topside exhaustion on recoveries ahead of 1932 IF price is indeed heading lower.” Gold registered a low at 1848 before rebounding with the recovery now approaching a technical confluence at channel resistance / August weekly-reversal close at 1932- looking for a reaction up here.

A topside breach / close above would be needed to keep the rally viable with such a scenario exposing subsequent resistance objectives at the 61.8% Fibonacci retracement at 1988 and the record high-week close at 2034. Support unchanged at 1836 and the 2020102 high /. 100% extension at 1795-1803- both levels of interest for possible downside exhaustion IF reached.

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Bottom line: Gold prices have rebounded off channel support with the recovery now approaching downtrend resistance- look for inflection on a test of 1932 for guidance. From a trading standpoint, a good zone to reduce long-exposure / raise protective stops- be on the lookout for topside exhaustion into channel resistance IF prices is still heading lower. Ultimately, a larger correction may offer more favorable opportunities closer to uptrend support. A topside breach would likely fuel an accelerated rally here- stay nimble. Review my latest Gold Price Outlook for a closer look at the near-term XAU/USD technical trading levels.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

GOLD TRADER SENTIMENT – XAU/USD PRICE CHART
Gold Price Chart XAU USD
A summary of IG Client Sentiment shows traders are net-long Gold- the ratio stands at +3.01 (75.09% of traders are long) – bearishreading
Long positions are9.42% lower than yesterday and 8.60% lower from last week
Short positions are11.07% higher than yesterday and 13.67% higher from last week
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Gold prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current Gold price trend may soon reverse higher despite the fact traders remain net-long.
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11/10/2020

Sterling (GBP) Weekly Outlook: EU/UK Trade Talks - It's Time to Decide

EU/UK TRADE TALKS AND GBP/USD PRICE, ANALYSIS AND CHART:
European Council Meeting on October 15-16 is key.
Both sides are making positive noises but remain far apart.
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The EU and UK trade negotiating teams will be hard at work next week trying to iron out the many differences that they currently have against a time-constrained backdrop. The EC meeting starts on Thursday next week and the EU have always pointed to this meeting as the last chance to get a deal done and then ratified before December 31. UK PM Boris Johnson has also chosen October 15 as the last day to see if a deal can be struck between the two sides before talks go down the WTO-route. Flexibility remains the key in these talks and these deadlines may well be flexible if both sides believe a deal can be struck. Both sides are making appeasing sounds but reiterate that the other side has to ‘move more’ before a deal can be made. The markets currently see a better chance than not of a deal taking place, although it may just be a bare-boned no tariff deal to make sure trade flows are uninterrupted from the start of next year.

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Sterling currently trades around 1.3000 against a weak US dollar and is approaching initial resistance off the 50-dma at 1.3022. The CCI indicator suggests the pair are overbought but with a potentially volatile period ahead next week, the pair can become extremely overbought or oversold in a short-space of time.

GBP/USD DAILY PRICE CHART (FEBRUARY – OCTOBER 9, 2020)
Sterling (GBP) Weekly Outlook: EU/UK Trade Talks - It's Time to Decide
GBP/USD
BULLISH
Data provided by
CHANGE IN LONGS SHORTS OI
DAILY -17% 3% -6%
WEEKLY -9% 11% 2%
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IG client sentiment datashows 45.10% of traders are net-long with the ratio of traders short to long at 1.22 to 1.The number of traders net-long is 1.88% higher than yesterday and 12.76% higher from last week, while the number of traders net-short is 1.07% higher than yesterday and 14.58% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBP/USD prices may continue to rise. Positioning is less net-short than yesterday but more net-short from last week. The combination of current sentiment and recent changes gives us a further mixed GBP/USD trading bias.

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