VOT Research Desk
Nov 2,2022
Market Analytics and Considerations
Since September, the British pound has been increasing.
Net-long bets on the GBP/USD and GBP/JPY have increased among active traders.
Since prices hit a bottom in the midst of September, the British pound has been moving higher. Market participants upped their downward exposure as GBP/USD and GBP/JPY rose, maybe anticipating a reversal south. It frequently serves as a contrarian signal, reveals this. Investors have recently started to expand their exposure to the upside. Could this be a precursor of future GBP frailty.
59% or so of retail traders are long position GBP/USD. Given that the majority of traders are net long, this means that prices could drop further. In comparison to yesterday and last week, the amount of upside exposure has increased by 1.86% and 7.45%, respectively. In light of this, the interaction between the present mood and previous developments provides a stronger negative opposing trade tendency.
GBP/JPY appears to be seeking to confirm a breach under rising support from September on the graph. That might allow for a turnaround. The prior resistance range of 167.63 – 168.72 seems to be the nearest source of support. A breach under the latter could hasten such a turn in the direction of the October bottom. Nevertheless, continuing advances puts the 78.6% Fibonacci extension at 173 in the spotlight.
The crucial long-term declining trendline from the start of this year is in front of GBP/USD. That has continued to keep the downside in general focus. In the meantime, a recent upward trending support level from September appears to be providing a quick positive bias. In light of this, a breach appears to be coming soon. It is possible to face August highs once the resistance area between 1.1639 and 1.1738 has been broken. In contrast hand, breaking through rising support makes it possible for the September bottom to be reached once more in the future.
