British Pound Gains May Slow
GBPUSD - Forex trading crowds have remained net-short the British Pound against the US Dollar since the pair traded near the 1.5600 mark, providing strong contrarian signal to go long. Yet a noteworthy pullback in short interest and bounce in long positions suggests momentum may slow. The ratio of long to short positions in the GBPUSD stands at -1.98 as nearly 66% of traders are short. This compares to yesterday when the ratio was at -2.97 as 75% of open positions were short. In detail, long positions are 32.4% higher than yesterday and 7.9% weaker since last week. Short positions are 11.7% lower than yesterday and 29.2% stronger since last week. Open interest is 0.6% weaker than yesterday and 3.4% above its monthly average. The SSI is a contrarian indicator and signals more GBPUSD gains, but the moderation in sentiment suggests gains may slow.
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USDOLLAR to Benefit from Euro Summit Indecision European political leaders meet this Thursday for the 19th time to discuss the continent’s on-going sovereign debt crisis. A resolution to the crisis has been elusive with the strategy of austerity tipping weak economies into severe recessions. The weaker European Union economies are asking for lessened austerity measures and likely won’t receive it. This strategy stand-off could lead to a risk sell-off. In the event of risk sell off, the US Dollar stands to be the biggest beneficiary of Euro Summit indecision. Use the Donchian channel strategy to time entries and exits when buying the US Dollar. Last week, twitter was lit up with polls about how 55% of Germans want to abandon the Euro and return to their own currency. Germans are becoming tired of bailing out other high spending countries and not receiving any confidence on a balanced budget in return. Many economists have talked about how a Euro breakout will cost more for the Germans ...
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