The pound has been steady in recent months and has even risen since the shortterm decline during the Brexit procedure.
The pound then went up and has already risen above the trend lines of 7 other currencies. Now this is probably the case with the GBP / AUD pair after the price has reached the bearish trend line. The price has made a correction to support and we are now expecting a possible increase in diagonal and horizontal support.
GBP / x technical data:
Bullish Formations for Breakthrough: 7 of 9
Pairs in which the Pounds is traded over 200 DTM: 6 out of 9
The decline after the referendum is as follows: AUD - 10%, USD - 10%, CAD - 7%, JPY - 2%.
The market profile continues to support the currency after the low levels in April resisted the supports formed in March.
Investors are still short, as the graph shows, with net short positions more than the long ones by 41%. Although sentiment remains bearish to the currency at all, the divergence between net short positions of margin and options market positions probably indicates the risks for a stronger pound are heightened, and we may see a strong repositioning in the currency.
Source: Bloomberg
Trader Senan Fuchedzhiev
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