Pound sterling IG client sentiment talking points<\/p>\n
GBP\/USD IG client sentiment outlook – bearish<\/p>\n
The pound has been cautiously rising versus the US dollar on headlines that have helped to cool worries about a ‘no-deal’ Brexit<\/a> to a certain extent. This is as UK Prime Minister Boris Johnson and European Commission president Jean-Claude Juncker prepare to discuss options on replacing the Irish backstop, a sticking point in withdrawal talks. But what do positioning and technical analysis have to say for GBP\/USD<\/a>?<\/p>\n We typically take a contrarian view to crowd sentiment, and the fact traders are net-long GBP\/USD suggests that prices may continue falling. However, since 9 August the percentage of traders biased to the upside has declined from about 80% to 70%. Unsurprisingly, the currency pair climbed about 2%. But recent changes in IG client sentiment are now offering a stronger bearish contrarian trading bias.<\/p>\n As of 27 August, traders are further net-long than the previous day and week respectively. If interest in going long sterling increases, we may see the currency resume weakness against the US dollar. On the flip side of the spectrum, should net-long GBP\/USD positioning continue unwinding, there may be more room for the currency pair to recover.<\/p>\n