FxWirePro: Energized pound tests key resistance; further rise likely

The pound is the strongest today and this week, as positive Brexit news has energized the bulls.

• Reports have come out suggesting that Prime Minister Theresa May and her cabinet considering a proposal that would remove a ‘no agreement’ scenario off the table.
• Last night, UK’s opposition Labour Party’s leader Jeremy Corbyn announced his support in avoiding a ‘no agreement’ scenario and his support to include the public’s opinion via a second Brexit referendum.

The pound bulls are just loving it.

Since the rumor began to surface since late last week, the pound has moved higher by almost 300 pips against the USD. It is currently trading at 1.319 against the USD.

Retail sentiment:

• The retail sentiment is suggesting that the pound is likely to move higher.
• The sentiment reports from IG Markets, which is a UK-based company providing trading in financial derivatives such as contracts for difference and financial spread betting, strongly suggest that Pound is likely to rise against the USD.
• IG markets’ retail positions data provide a glimpse to retail traders’ positions, which are largely used a contrarian indicator since retail positioning moves in opposite direction to market movements.
• Retail positions just shifted from net long on the pound to net short. As of today, 48 percent of the positions are on the long side, while 52 percent are short on the pound, giving it a slightly bullish bias.