As per the prior analysis, GBP/USD Price Analysis: Under pressure between 21-day SMA and 50% Fibonacci, the pound is creeping higher, but what is the longer-term outlook?
Looking to the COT report, we can see that the commercials are now short which could signal a fade on rallies and a resumption of the 2018 downtrend as large investors/speculators move to the highest long position since April 2018 and thus buyers are drying up ahead of a large open space all the way back to 1.3900. The rise in GBP net longs, (+8% of o.i.), suggests more downside risk to sterling if the Bank of England cuts rates. There need's to be a correction before blue skies, especially should there not be a seismic meaning fundamental shock to the markets that could trigger such a move:
The downside correction we witnessed was the healthy reaction where X marked the spot (31.8% /50% Fibo confluence) in the 1.29 handle as follows.
Daily chart, bulls in control and target prior swing highs of 1.3320 as the -27.0% Fibo – (138.2% higher up at 1.3400).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.