Sentiment Analysis: GBP/USD, EUR/USD
- GBP/USD at extended levels: where to from here? EUR/USD showing signs of bullish fatigue
- Institutional speculators and IG retail client sentiment at opposite ends of the positioning spectrum
- IG client sentiment – a well-known contrarian indicator – positioned in favour of reversals in both pairs
- The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library
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GBP/USD at Extended Levels: Where to From Here?
Cable has accelerated higher, mainly on the back of a sharp dollar selloff in the wake of much improved US inflation data. The move however, appears over extended and recent price action has revealed a shallow pullback thus far. In strong trending markets, pullbacks tend to be shallow, and today’s intra-day move higher might be the start of the next leg higher in the pair but more confirmation is required.
A break and hold of the recent swing high helps provide a greater degree of confidence to the current uptrend as the RSI attempts to see a return to more ‘normal’ conditions. Support remains at the psychological level of 1.3000, with resistance all the way up at 1.3413.
Source: TradingView, prepared by Richard Snow
Large Speculators (Hedge Funds) Favour Bullish Continuation in GBP/USD
CFTC data derived from the commitments of traders reports reveals that large institutional speculators who are obliged to report positioning with the CFTC, shows what has been an increasing appetite for further GBP/USD upside. Aggregate positioning is more net long than before – suggesting further upside in cable. However, the latest data points do not include positioning after the pivotal US inflation print last Wednesday. Data up until today will be reported on Friday so keep an eye out for those to see if large speculators are even more in favour of GBP/USD upside.
Large Speculators (Typically Hedge Funds) CoT Data Positioned for Further Upside
Source: Refinitiv, CFTC Commitment of Traders Report, prepared by Richard Snow
IG client sentiment encapsulates a rather unfortunate reality among traders which is the tendency to call tops and bottoms in strong trending markets. More than 71% of traders are net-short, seeking an imminent reversal. Unfortunately, price action and retail positioning exhibit an inverse relationship – hence the contrarian tag.
IG Client Sentiment (Contrarian Indicator) Showing Massive Short Bets
Source: TradingView, prepared by Richard Snow
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EUR/USD Bullish Advance Shows Signs of Possible Fatigue
EUR/USD has advanced at an alarming rate ever since the USD selloff took hold. However, the appearance of extended upper candle wicks suggest there could be a challenge to further upside. Resistance appears at 1.1360 – a zone of prior resistance at the end of 2021 with support at the 61.8% Fibonacci retracement of the major 2000 to 2008 major advance. The RSI also indicates that we could be due a minor retracement but keep in mind that a weaker dollar would keep the pair stuck in oversold territory for some time yet.
EUR/USD Daily Chart
Source: TradingView, prepared by Richard Snow
EUR/USD Remains Net-Long but Speculators Are Reducing Long Positioning
Large speculators remain heavily net-long but the less of a degree than before, possibly die to worsening fundamental data weighing on lofty rate expectations or an overvalued euro. The vertical bars reveal the net positioning and a steady decline can be seen from the June high as shorts remain steady but longs decline notably.
Large Speculators (Typically Hedge Funds) CoT Data Sees Decline in Long Positioning
Source: Refinitiv, CFTC Commitment of Traders Report, prepared by Richard Snow
Recommended by Richard Snow
See what our analysts foresee in EUR in Q3
IG client sentiment reveals that more than 75% of traders are net short EUR/USD. As noted before, such one-sided positioning flies in the face of a strong trending market. Eventually, a reversal will happen, the question is simply a matter of time but thus far price action has seen impressive moves higher.
IG Client Sentiment Revealing Massive Short Bets
Source: TradingView, prepared by Richard Snow
— Written by Richard Snow for DailyFX.com
Contact and follow Richard on Twitter: @RichardSnowFX
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__async$3(this,null,function*()this.replaceHeadAndBody(),this.activateScriptElements())replaceHeadAndBody()vardocumentElement,head=document;documentElement.replaceChild(this.newHead,head),this.renderElement(this.currentElement,this.newElement)activateScriptElements()for(const replaceableElement of this.scriptElements)var element,parentNode=replaceableElement.parentNode;parentNode&&(element=activateScriptElement(replaceableElement),parentNode.replaceChild(element,replaceableElement))get newHead()return this.newSnapshot.headSnapshot.elementget scriptElements()return document.documentElement.querySelectorAll("script")class PageRenderer extends Renderer{static renderElement(currentElement,newElement)document.body&&newElement instanceof HTMLBodyElement?document.body.replaceWith(newElement):document.documentElement.appendChild(newElement)get shouldRender()return this.newSnapshot.isVisitable&&this.trackedElementsAreIdenticalget reloadReason()return this.newSnapshot.isVisitable?this.trackedElementsAreIdentical?void 0:reason:"tracked_element_mismatch":reason:"turbo_visit_control_is_reload"prepareToRender()return __async$3(this,null,function*()yield this.mergeHead())render()return __async$3(this,null,function*()this.willRender&&(yield this.replaceBody()))finishRendering()this.focusFirstAutofocusableElement()get currentHeadSnapshot()return this.currentSnapshot.headSnapshotget newHeadSnapshot()return this.newSnapshot.headSnapshotget newElement()return this.newSnapshot.elementmergeHead()return __async$3(this,null,function*()var mergedHeadElements=this.mergeProvisionalElements(),newStylesheetElements=this.copyNewHeadStylesheetElements();this.copyNewHeadScriptElements(),yield mergedHeadElements,yield newStylesheetElements)replaceBody()return __async$3(this,null,function*()yield this.preservingPermanentElements(()=>__async$3(this,null,function*()this.activateNewBody(),yield this.assignNewBody())))get trackedElementsAreIdentical()return this.currentHeadSnapshot.trackedElementSignature==this.newHeadSnapshot.trackedElementSignaturecopyNewHeadStylesheetElements(){return __async$3(this,null,function*()var loadingElements=[];for(const element of this.newHeadStylesheetElements)loadingElements.push(function waitForLoad(element,timeoutInMilliseconds=2e3)return new Promise(resolve=>const onComplete=()=>element.removeEventListener("error",onComplete),element.removeEventListener("load",onComplete),resolve();element.addEventListener("load",onComplete,once:!0),element.addEventListener("error",onComplete,once:!0),setTimeout(resolve,timeoutInMilliseconds))(element)),document.head.appendChild(element);yield Promise.all(loadingElements))}copyNewHeadScriptElements()for(const element of this.newHeadScriptElements)document.head.appendChild(activateScriptElement(element))mergeProvisionalElements()return __async$3(this,null,function*()var newHeadElements=[...this.newHeadProvisionalElements];for(const element of this.currentHeadProvisionalElements)this.isCurrentElementInElementList(element,newHeadElements))isCurrentElementInElementList(element,elementList)for(var[index,newElement]of elementList.entries())if("TITLE"==element.tagName)if("TITLE"!=newElement.tagName)continue;if(element.innerHTML==newElement.innerHTML)return elementList.splice(index,1),!0if(newElement.isEqualNode(element))return elementList.splice(index,1),!0return!1removeCurrentHeadProvisionalElements()for(const element of this.currentHeadProvisionalElements)document.head.removeChild(element)copyNewHeadProvisionalElements()for(const element of this.newHeadProvisionalElements)document.head.appendChild(element)activateNewBody()document.adoptNode(this.newElement),this.activateNewBodyScriptElements()activateNewBodyScriptElements()for(const inertScriptElement of this.newBodyScriptElements)var activatedScriptElement=activateScriptElement(inertScriptElement);inertScriptElement.replaceWith(activatedScriptElement)assignNewBody()return __async$3(this,null,function*()yield this.renderElement(this.currentElement,this.newElement))get newHeadStylesheetElements()return this.newHeadSnapshot.getStylesheetElementsNotInSnapshot(this.currentHeadSnapshot)get newHeadScriptElements()return this.newHeadSnapshot.getScriptElementsNotInSnapshot(this.currentHeadSnapshot)get currentHeadProvisionalElements()return this.currentHeadSnapshot.provisionalElementsget newHeadProvisionalElements()return this.newHeadSnapshot.provisionalElementsget newBodyScriptElements()return this.newElement.querySelectorAll("script")}class SnapshotCacheconstructor(size)this.keys=[],this.snapshots=,this.size=sizehas(location2)return toCacheKey(location2)in this.snapshotsget(location2)var snapshot;if(this.has(location2))return snapshot=this.read(location2),this.touch(location2),snapshotput(location2,snapshot)return this.write(location2,snapshot),this.touch(location2),snapshotclear()this.snapshots=read(location2)return this.snapshots[toCacheKey(location2)]write(location2,snapshot)this.snapshots[toCacheKey(location2)]=snapshottouch(location2)var location2=toCacheKey(location2),index=this.keys.indexOf(location2);-1setTimeout(()=>resolve(),0))(),snapshot=snapshot.clone(),this.snapshotCache.put(location2,snapshot),snapshot)getCachedSnapshotForLocation(location2)return this.snapshotCache.get(location2)get snapshot()return PageSnapshot.fromElement(this.element)class Preloader{constructor(delegate)this.selector="a[data-turbo-preload]",this.delegate=delegateget snapshotCache()return this.delegate.navigator.view.snapshotCachestart()if("loading"===document.readyState)return document.addEventListener("DOMContentLoaded",()=>this.preloadOnLoadLinksForView(document.body));this.preloadOnLoadLinksForView(document.body)preloadOnLoadLinksForView(element)for(const link of element.querySelectorAll(this.selector))this.preloadURL(link)preloadURL(link){return __async$3(this,null,function*()var location2=new URL(link.href);if(!this.snapshotCache.has(location2))tryvar responseText=yield(yield fetch(location2.toString(),headers:"VND.PREFETCH":"true",Accept:"text/html")).text(),snapshot=PageSnapshot.fromHTMLString(responseText);this.snapshotCache.put(location2,snapshot)catch(_))}}function extendURLWithDeprecatedProperties(url)Object.defineProperties(url,deprecatedLocationPropertyDescriptors)const deprecatedLocationPropertyDescriptors=absoluteURL:get()return this.toString();const StreamActions=after()this.targetElements.forEach(e=>var _a;return null==(_a=e.parentElement)?void 0:_a.insertBefore(this.templateContent,e.nextSibling)),append()this.removeDuplicateTargetChildren(),this.targetElements.forEach(e=>e.append(this.templateContent)),before()this.targetElements.forEach(e=>var _a;return null==(_a=e.parentElement)?void 0:_a.insertBefore(this.templateContent,e)),prepend()this.removeDuplicateTargetChildren(),this.targetElements.forEach(e=>e.prepend(this.templateContent)),remove()this.targetElements.forEach(e=>e.remove()),replace()this.targetElements.forEach(e=>e.replaceWith(this.templateContent)),update()this.targetElements.forEach(targetElement=>targetElement.innerHTML="",targetElement.append(this.templateContent)),session=new class Sessionconstructor()this.navigator=new Navigator(this),this.history=new History(this),this.preloader=new Preloader(this),this.view=new PageView(this,document.documentElement),this.adapter=new BrowserAdapter(this),this.pageObserver=new PageObserver(this),this.cacheObserver=new CacheObserver,this.linkClickObserver=new LinkClickObserver(this,window),this.formSubmitObserver=new FormSubmitObserver(this,document),this.scrollObserver=new ScrollObserver(this),this.streamObserver=new StreamObserver(this),this.formLinkClickObserver=new FormLinkClickObserver(this,document.documentElement),this.frameRedirector=new FrameRedirector(this,document.documentElement),this.streamMessageRenderer=new StreamMessageRenderer,this.drive=!0,this.enabled=!0,this.progressBarDelay=500,this.started=!1,this.formMode="on"start()(this.pageObserver.start(),this.cacheObserver.start(),this.formLinkClickObserver.start(),this.linkClickObserver.start(),this.formSubmitObserver.start(),this.scrollObserver.start(),this.streamObserver.start(),this.frameRedirector.start(),this.history.start(),this.preloader.start(),this.started=!0,this.enabled=!0)disable()this.enabled=!1stop()this.started&&(this.pageObserver.stop(),this.cacheObserver.stop(),this.formLinkClickObserver.stop(),this.linkClickObserver.stop(),this.formSubmitObserver.stop(),this.scrollObserver.stop(),this.streamObserver.stop(),this.frameRedirector.stop(),this.history.stop(),this.started=!1)registerAdapter(adapter)this.adapter=adaptervisit(location2,options=)var frameElement=options.frame?document.getElementById(options.frame):null;frameElement instanceof FrameElement?(frameElement.src=location2.toString(),frameElement.loaded):this.navigator.proposeVisit(expandURL(location2),options)connectStreamSource(source)this.streamObserver.connectStreamSource(source)disconnectStreamSource(source)this.streamObserver.disconnectStreamSource(source)renderStreamMessage(message)this.streamMessageRenderer.render(StreamMessage.wrap(message))clearCache()this.view.clearSnapshotCache()setProgressBarDelay(delay)this.progressBarDelay=delaysetFormMode(mode)this.formMode=modeget location()return this.history.locationget restorationIdentifier()return this.history.restorationIdentifierhistoryPoppedToLocationWithRestorationIdentifier(location2,restorationIdentifier)this.enabled?this.navigator.startVisit(location2,restorationIdentifier,action:"restore",historyChanged:!0):this.adapter.pageInvalidated(reason:"turbo_disabled")scrollPositionChanged(position)this.history.updateRestorationData(scrollPosition:position)willSubmitFormLinkToLocation(link,location2)return this.elementIsNavigatable(link)&&locationIsVisitable(location2,this.snapshot.rootLocation)submittedFormLinkToLocation()willFollowLinkToLocation(link,location2,event)return this.elementIsNavigatable(link)&&locationIsVisitable(location2,this.snapshot.rootLocation)&&this.applicationAllowsFollowingLinkToLocation(link,location2,event)followedLinkToLocation(link,location2)var action=this.getActionForLink(link),link=link.hasAttribute("data-turbo-stream");this.visit(location2.href,action:action,acceptsStreamResponse:link)allowsVisitingLocationWithAction(location2,action)return this.locationWithActionIsSamePage(location2,action)visitProposedToLocation(location2,options)extendURLWithDeprecatedProperties(location2),this.adapter.visitProposedToLocation(location2,options)visitStarted(visit2)visitCompleted(visit2)clearBusyState(document.documentElement),this.notifyApplicationAfterPageLoad(visit2.getTimingMetrics())locationWithActionIsSamePage(location2,action)return this.navigator.locationWithActionIsSamePage(location2,action)visitScrolledToSamePageLocation(oldURL,newURL)this.notifyApplicationAfterVisitingSamePageLocation(oldURL,newURL)willSubmitForm(form,submitter)var action=getAction(form,submitter);return this.submissionIsNavigatable(form,submitter)&&locationIsVisitable(expandURL(action),this.snapshot.rootLocation)formSubmitted(form,submitter)this.navigator.submitForm(form,submitter)pageBecameInteractive()this.view.lastRenderedLocation=this.location,this.notifyApplicationAfterPageLoad()pageLoaded()this.history.assumeControlOfScrollRestoration()pageWillUnload()this.history.relinquishControlOfScrollRestoration()receivedMessageFromStream(message)this.renderStreamMessage(message)viewWillCacheSnapshot()this.notifyApplicationBeforeCachingSnapshot()allowsImmediateRender(element,options)vardefaultPrevented:element,detail:render:options=this.notifyApplicationBeforeRender(element,options);return this.view.renderer&&options&&(this.view.renderer.renderElement=options),!elementviewRenderedSnapshot(_snapshot,_isPreview)this.view.lastRenderedLocation=this.history.location,this.notifyApplicationAfterRender()preloadOnLoadLinksForView(element)this.preloader.preloadOnLoadLinksForView(element)viewInvalidated(reason)this.adapter.pageInvalidated(reason)frameLoaded(frame)this.notifyApplicationAfterFrameLoad(frame)frameRendered(fetchResponse,frame)this.notifyApplicationAfterFrameRender(fetchResponse,frame)applicationAllowsFollowingLinkToLocation(link,location2,ev)return!this.notifyApplicationAfterClickingLinkToLocation(link,location2,ev).defaultPreventedapplicationAllowsVisitingLocation(location2)return!this.notifyApplicationBeforeVisitingLocation(location2).defaultPreventednotifyApplicationAfterClickingLinkToLocation(link,location2,event)return dispatch("turbo:click",target:link,detail:url:location2.href,originalEvent:event,cancelable:!0)notifyApplicationBeforeVisitingLocation(location2)return dispatch("turbo:before-visit",detail:url:location2.href,cancelable:!0)notifyApplicationAfterVisitingLocation(location2,action)return dispatch("turbo:visit",detail:url:location2.href,action:action)notifyApplicationBeforeCachingSnapshot()return dispatch("turbo:before-cache")notifyApplicationBeforeRender(newBody,options)return dispatch("turbo:before-render",detail:Object.assign(newBody:newBody,options),cancelable:!0)notifyApplicationAfterRender()return dispatch("turbo:render")notifyApplicationAfterPageLoad(timing=)return dispatch("turbo:load",detail:url:this.location.href,timing:timing)notifyApplicationAfterVisitingSamePageLocation(oldURL,newURL)dispatchEvent(new HashChangeEvent("hashchange",oldURL:oldURL.toString(),newURL:newURL.toString()))notifyApplicationAfterFrameLoad(frame)return dispatch("turbo:frame-load",target:frame)notifyApplicationAfterFrameRender(fetchResponse,frame)return dispatch("turbo:frame-render",detail:fetchResponse:fetchResponse,target:frame,cancelable:!0)submissionIsNavigatable(form,submitter)return"off"!=this.formMode&&(submitter=!submitterelementIsNavigatable(element)var container=findClosestRecursively(element,"[data-turbo]"),element=findClosestRecursively(element,"turbo-frame");return this.drivegetActionForLink(link)"advance"get snapshot()return this.view.snapshot;var prototype=new class Cacheconstructor(session2)this.session=session2clear()this.session.clearCache()resetCacheControl()this.setCacheControl("")exemptPageFromCache()this.setCacheControl("no-cache")exemptPageFromPreview()this.setCacheControl("no-preview")setCacheControl(value)!function setMetaContent(name,content)let element=getMetaElement(name);element("turbo-cache-control",value)(session),navigator$1=session["navigator"];function start()session.start()function registerAdapter(adapter)session.registerAdapter(adapter)function visit(location2,options)session.visit(location2,options)function connectStreamSource(source)session.connectStreamSource(source)function disconnectStreamSource(source)session.disconnectStreamSource(source)function renderStreamMessage(message)session.renderStreamMessage(message)function clearCache()console.warn("Please replace `Turbo.clearCache()` with `Turbo.cache.clear()`. The top-level function is deprecated and will be removed in a future version of Turbo.`"),session.clearCache()function setProgressBarDelay(delay)session.setProgressBarDelay(delay)function setConfirmMethod(confirmMethod)FormSubmission.confirmMethod=confirmMethodfunction setFormMode(mode)session.setFormMode(mode)var Turbo=Object.freeze(__proto__:null,navigator:navigator$1,session:session,cache:prototype,PageRenderer:PageRenderer,PageSnapshot:PageSnapshot,FrameRenderer:FrameRenderer,start:start,registerAdapter:registerAdapter,visit:visit,connectStreamSource:connectStreamSource,disconnectStreamSource:disconnectStreamSource,renderStreamMessage:renderStreamMessage,clearCache:clearCache,setProgressBarDelay:setProgressBarDelay,setConfirmMethod:setConfirmMethod,setFormMode:setFormMode,StreamActions:StreamActions);class TurboFrameMissingError extends Errorfunction getFrameElementById(id)if(null!=id)id=document.getElementById(id);if(id instanceof FrameElement)return idfunction activateElement(element,currentURL)if(element)var src=element.getAttribute("src");if(null!=src&&null!=currentURL&&function urlsAreEqual(left,right)return expandURL(left).href==expandURL(right).href(src,currentURL))throw new Error(`Matching element has a source URL which references itself`);if((element=element.ownerDocument!==document?document.importNode(element,!0):element)instanceof FrameElement)return element.connectedCallback(),element.disconnectedCallback(),elementclass StreamElement extends HTMLElementstatic renderElement(newElement)return __async$3(this,null,function*()yield newElement.performAction())connectedCallback()return __async$3(this,null,function*()tryyield this.render()catch(error)console.error(error)finallythis.disconnect())render()return __async$3(this,null,function*()var _a;return null!=(_a=this.renderPromise)?_a:this.renderPromise=__async$3(this,null,function*()var event=this.beforeRenderEvent;this.dispatchEvent(event)&&(yield nextAnimationFrame(),yield event.detail.render(this))))disconnect()trythis.remove()catch(_a)removeDuplicateTargetChildren()this.duplicateChildren.forEach(c=>c.remove())get duplicateChildren()var _a,existingChildren=this.targetElements.flatMap(e=>[...e.children]).filter(c=>!!c.id);const newChildrenIds=[...(null==(_a=this.templateContent)?void 0:_a.children)get performAction()if(this.action)var actionFunction=StreamActions[this.action];if(actionFunction)return actionFunction;this.raise("unknown action")this.raise("action attribute is missing")get targetElements()return this.target?this.targetElementsById:this.targets?this.targetElementsByQuery:void this.raise("target or targets attribute is missing")get templateContent()return this.templateElement.content.cloneNode(!0)get templateElement()var template;return null===this.firstElementChild?(template=this.ownerDocument.createElement("template"),this.appendChild(template),template):this.firstElementChild instanceof HTMLTemplateElement?this.firstElementChild:void this.raise("first child element must be a

