FxWirePro: GBP/USD heads to test key trend line; retail sentiment favors sellers

From one trend line to another,

• As a key trend line shows in the graph, which has been in place since February this year, failed to support the pound today against the USD amid a stronger dollar and Brexit uncertainties, sterling is heading to lower to test another key trend line, which should provide support around 1.295-1.3 area.
• The looming trend line has been in place since November last year and has lent support to pound four times already and the GBP/USD exchange rate is heading lower to retest the line again.  

The retail sentiment in favor of the bears,

• 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 the pound is likely to move lower.
• 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.
• As of today, according to data from IG markets, 66 percent of retail positions are bullish on GBP/USD, while only 34 percent are on the short side, suggesting further downside possibility.