British Pound Outlook & Sentiment Analysis: GBP/USD, GBP/JPY, EUR/GBP

Most Read: Australian Dollar Outlook & Sentiment Analysis: AUD/USD, AUD/JPY

The instinct to follow the crowd is powerful in trading – buying in moments of euphoria and selling during a widespread panic. However, savvy traders understand the potential opportunities hidden within contrarian strategies. Indicators like IG client sentiment offer a unique window into the market’s collective mood, potentially pinpointing moments where excessive optimism or pessimism may hint at an approaching trend reversal.

Naturally, contrarian signals aren’t foolproof. They become most powerful when combined with a well-rounded trading plan. By carefully incorporating contrarian signals alongside technical and fundamental analyses, traders develop a richer understanding of the market’s underlying dynamics – aspects that the majority might easily miss. Let’s illustrate this idea by analyzing IG client sentiment and its potential influence on the British pound across three key pairs: GBP/USD, GBP/JPY and EUR/GBP.

Want to know where the British pound may be headed over the coming months? Explore all the insights available in our quarterly forecast. Request your complimentary guide today!

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GBP/USD FORECAST – MARKET SENTIMENT

According to IG data, 64.6% of clients are bullish on GBP/USD, with a long-to-short ratio standing at 1.82 to 1. The number of traders in net-long positions has increased by 17.96% since yesterday and by 27.85% compared to last week. Conversely, the tally of those holding bearish bets has decreased by 0.61% since yesterday and by 25.41% since last week.

With our unique interpretation of crowd behavior, the current dominance of bullish positions suggests a possible extension of GBP/USD’s weakness. The substantial increase in net long wagers and changes in market positioning on various timeframes reinforces our bearish contrarian bias on GBP/USD. This means a move below 1.2500 could be around the corner.

Important Reminder: Contrarian signals offer valuable insights, but it’s crucial to integrate them into a broader analysis incorporating technical and fundamental factors. This allows for more informed trading decisions.

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GBP/JPY FORECAST – MARKET SENTIMENT

IG data reveals a predominantly bearish stance on GBP/JPY, with 74.48% of clients holding net-short positions. This translates to a short-to-long ratio of 2.92 to 1. While this bearishness has slightly decreased compared to yesterday (3.09%) and last week (0.99%), it remains significant.

Our approach often favors a contrarian viewpoint. This prevalent pessimism towards GBP/JPY hints at potential upside for the pair. The continued net-short positioning further strengthens this bullish contrarian outlook.

Key point: Remember, contrarian signals offer a unique perspective but should always be considered alongside technical and fundamental analysis for a comprehensive trading strategy.

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Interested in understanding how retail positioning may shape EUR/GBP’s near-term outlook? Our sentiment guide holds all the answers. Don’t wait, download your free guide today!




of clients are net long.




of clients are net short.

Change in Longs Shorts OI
Daily 5% -6% 1%
Weekly 9% -25% -6%

EUR/GBP FORECAST – MARKET SENTIMENT

IG data indicates that the retail crowd maintains a bullish bias towards EUR/GBP, with 67.89% of clients currently holding net-long positions. This translates to a long-to-short ratio of 2.11 to 1. Net-long bets have risen by 7.2% since yesterday and by 11.21% since last week, whereas traders with net-short wagers have decreased by a l4.08% versus yesterday and by 28.52% relative to prevailing levels seven days ago.

We commonly take a contrarian approach to herd positioning in trading. The existing bullish sentiment among retail traders signals that EUR/GBP may see continued losses in the short term. The steady uptick in net-long positions further bolsters this bearish contrarian perspective.

Important Reminder: While contrarian signals provide valuable insights, they are best used to complement a well-rounded trading strategy that includes technical and fundamental analysis.

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Dow and S&P 500 under pressure following US inflation news, while Nikkei 225 recovers some losses​​​​​

Dow Jones, S&P 500, Nikkei 225 Analysis and Charts

​​​Dow slumps following CPI data

​US inflation news yesterday sent Wall Street into a tailspin, and the Dow briefly hit its lowest level since 14 February.​While the index is still barely two weeks away from its most recent record high, it has been unable to maintain upward momentum. Over the past week, the index has closed below the 50-day simple moving average (SMA) for the first time since early November.​

​Additional declines could see the price head towards the rising 100-day SMA, and to the 13 February low at 38,037. A close back above 39,000 might indicate that a low has been formed for the time being.

Dow Jones Daily Chart – April 11th, 2024

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S&P 500 holds above 50-day MA

​For this index the declines have been less dramatic, though slightly more drawn out. Wednesday’s session saw the price fall to a three-week low, but overall the uptrend from October remains intact. The S&P 500, unlike its bigger cousin the Dow, continues to hold above the 50-day SMA.

​A close below the 50-day SMA could point towards more short-term weakness, while a recovery above 5250 could signal that a low is in place.

S&P500 Daily Chart – April 11th, 2024

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of clients are net long.




of clients are net short.

Change in Longs Shorts OI
Daily 15% -3% 3%
Weekly -2% 2% 1%

Nikkei 225 edges up from Wednesday’s low

​Japanese markets were rocked by yesterday’s US CPI figure, but persistent yen weakness has helped limit the downside for the time being. ​Indeed, the Nikkei has managed to hold above the low seen last week at 38,771, though it has slipped below the 50-day SMA once more. A low may have formed if 39,000 can hold, and the index close above 40,000.

​​Further short-term weakness targets the early March low at 38,300.

Nikkei 225 Daily Chart – April 11th, 2024

Australian Dollar Outlook & Sentiment Analysis: AUD/USD, AUD/JPY

Most Read: US Dollar Soars after US CPI Data; USD/JPY Stages Bullish Breakout. What Now?

The allure of following the herd is strong – buying when everyone else is in a frenzy, and selling amidst widespread fear. Yet, seasoned traders understand the potential power of contrarian strategies. Indicators such as IG client sentiment offer a unique lens into the collective mood of the market, highlighting moments where excessive optimism or pessimism may signal an impending shift in the trend.

Of course, contrarian signals aren’t a guarantee. Their true value lies in their integration with a comprehensive trading plan. By blending contrarian insights with robust technical and fundamental analysis, traders gain a deeper understanding of the forces shaping prices. Let’s explore this concept by examining IG client sentiment on the Australian dollar across two pairs: AUD/USD and AUD/JPY.

If you’re wondering what’s in store for the Australian dollar this quarter, grab a free copy of the Aussie’s fundamental and technical trading guide.

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AUD/USD FORECAST –SENTIMENT ANALYSIS

IG data reveals an overwhelmingly bullish stance on AUD/USD among retail traders, with 77.82% holding net-long positions. This translates to a long-to-short ratio of 3.51 to 1. This optimism has intensified significantly, with buying positions surging by 44.17% since yesterday and 13.68% compared to last week, at a time when bearish bets have been reduced across both timeframes.

Our approach often favors a contrarian perspective. That said, the prevalent bullish sentiment raises the possibility of further downside for AUD/USD. The substantial increase in net-long positions witnessed in recent days further reinforces this bearish contrarian outlook.

Key Reminder: While contrarian signals offer valuable insights, they should always be considered within a broader analytical framework that includes technical and fundamental factors. This allows for more informed trading decisions.

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Interested in learning how retail positioning can shape the short-term trajectory of AUD/JPY? Our sentiment guide has the information you need—download it now!




of clients are net long.




of clients are net short.

Change in Longs Shorts OI
Daily 29% -25% -14%
Weekly -17% -13% -14%

AUD/JPY FORECAST – SENTIMENT ANALYSIS

IG data shows that 68.87% of the retail crowd is currently selling AUD/JPY, with the ratio of traders short-to-long standing at 2.21 to 1. The number of clients with bearish positions is down 19.94% from yesterday and 4.10% from last week, while the count of those with bullish stakes is up 29.59% from the previous session and down 11.19% from levels prevailing seven days ago.

While the fact that the retail segment is bearish on AUD/JPY suggests that the pair may have room to continue rising from a contrarian standpoint, we remain cautious about this assessment, with the hesitancy stemming from the blend of current sentiment and recent shifts in market positioning. Specifically, the reduction in bearish bets alongside an increase in bullish wagers among retail traders generates mixed signals, dampening our confidence the outlook.

Important note: Remember, contrarian signals offer valuable insights, but they are most powerful when used alongside technical and fundamental analysis for a comprehensive trading approach.

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Curious about GBP/USD’s path ahead? Dive into our second-quarter outlook for expert analysis and strategies. Don’t hesitate—request your free guide today and gain an edge in your trading!

FTSE 100, DAX 40 and Nasdaq 100 Await US CPI Print​​​

FTSE 100, DAX 40, Nasdaq 100 Analysis and Charts

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​​​FTSE 100 aims for the 8,000 mark

​ The FTSE 100 on Thursday tried to overcome the 8,000 mark but didn’t manage to do so before slipping to 7,856 only to be rising once more since then with the 8,000 level being back in sight. Above it lies the early April high at 8,017.

​Support is seen along the March-to-April uptrend line at 7,900 and last week’s 7,856 low.​Only a currently unexpected fall through Friday’s low at 7,856 would put the December to mid-March highs at 7,786 to 7,769 back on the map.

FTSE 100 Daily Chart – April 10th, 2024

DAX 40 regains lost ground

​The DAX 40, which on Tuesday slid to 18,059, is trying to regain lost ground ahead of today’s US March CPI print. ​For the bulls to regain control, a rise above Monday’s high at 18,329 needs to be seen. Below it lies Friday’s high at 18,223 and the April downtrend line at 18,252. Further up sits Thursday’s high at 18,429.

​Support sits at last week’s and Tuesday’s lows at 18,085 to 18,059 which, together with the 18,044 mid-March high should hold.

DAX 40 Daily Chart – April 10th, 2024

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of clients are net long.




of clients are net short.

Change in Longs Shorts OI
Daily -11% -2% -4%
Weekly 31% -8% -1%

Nasdaq 100 recovers further from last week’s fortnight low

​The Nasdaq 100’s recovery from Friday’s low at 17,866 has been bumpy but remains on the cards while Tuesday’s low at 17,969 holds. Below it meanders the 55-day simple moving average (SMA) at 17,922 and lies last week’s low at 17,866.

​A rise and daily chart close above recent highs at 18,211 to 18,213 would put the early April highs at 18,368 to 18,390 back on the cards.

Nasdaq 100 Daily Chart – April 10th, 2024

US Dollar Outlook & Sentiment Analysis: EUR/USD, GBP/USD, USD/CHF

Most Read: Gold Price Outlook – Drivers Behind Market Boom, Reversal or New Record Ahead?

Trading often pulls us to mimic the masses – buying in moments of euphoria and selling when panic strikes. However, experienced traders recognize the promise of contrarian approaches. Indicators like IG client sentiment provide a valuable perspective on the market’s overall mindset, exposing points where extreme optimism or pessimism hint at a looming trend change.

Naturally, contrarian signals aren’t foolproof. They’re most effective when integrated into a well-rounded trading plan. By weaving contrarian observations into a framework of technical and fundamental analysis, traders develop a more nuanced picture of market dynamics – dynamics the crowd may be missing. Let’s delve into this idea by analyzing IG client sentiment and its potential influence on the U.S. dollar within three significant FX pairs: EUR/USD, GBP/USD and USD/CHF.

Looking to anticipate the next significant shift in EUR/USD? Gain access to our quarterly forecast for in-depth insights. Request your complimentary guide today to stay updated on market trends!

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EUR/USD MARKET FORECAST – SENTIMENT ANALYSIS

IG data reveals a distinctly bearish stance on EUR/USD. A substantial 56.93% of traders anticipate a decline, creating a short-to-long ratio of 1.32 to 1. This pessimism is further reflected in the 14.69% increase in net-short positions since yesterday, and a dramatic 54.22% surge compared to last week.

We often take a dissenting stance on prevailing market sentiment in our strategy. The current net-short positioning suggests the EUR/USD might actually hold potential for further gains in the near term, with the increasing number of sellers on aggregate strengthening the case for a bullish contrarian outlook.

Important note: Contrarian signals provide valuable insights but should always be integrated into a broader analysis incorporating technical and fundamental factors for a well-informed trading decision.

A graph of a trading chart  Description automatically generated with medium confidence

Curious about GBP/USD’s path ahead? Dive into our second-quarter outlook for expert analysis and strategies. Don’t hesitate—request your free guide today and gain an edge in your trading!

Recommended by Diego Colman

Get Your Free GBP Forecast

GBP/USD MARKET FORECAST –SENTIMENT ANALYSIS

Recent IG data indicates a shift in sentiment towards the pound, with the market turning bearish for the first time since March 21st. Currently, 52.34% of clients are selling GBP/USD, resulting in a short-to-long ratio of 1.10 to 1. This bearish tilt is further evidenced by a 20.55% increase in net-short positions compared to yesterday and a 33.60% jump from last week.

Our approach often favors a contrarian viewpoint when it comes to crowd behavior. This newfound bearishness among the retail crowd hints at a potential continuation of GBP/USD’s upward trajectory, with the combination of current sentiment and recent positioning changes reinforcing our GBP/USD-bullish contrarian trading bias.

Important Note: Remember that contrarian signals are just one tool in a trader’s arsenal. They should be considered alongside other technical and fundamental indicators for a more comprehensive market analysis.

A graph of a trading chart  Description automatically generated with medium confidence

Keen to discover how retail positioning could offer insight into USD/CHF’s trajectory? Delve into our sentiment guide for invaluable insights into market psychology as a trend indicator. Download now!




of clients are net long.




of clients are net short.

Change in Longs Shorts OI
Daily 2% 1% 2%
Weekly 7% 10% 8%

USD/CHF MARKET FORECAST – SENTIMENT ANALYSIS

IG’s proprietary data reveals a significant bullish bias among retail clients on USD/CHF. Currently, 58.92% are betting on further upside, resulting in a long-to-short ratio of 1.43 to 1. This optimism has intensified, with net-long positions increasing by 3.50% since yesterday and 10.06% compared to last week.

Our trading philosophy often leans towards a contrarian perspective. That being said, the prevailing optimism among retail traders on the U.S. dollar’s prospects suggests a possible pullback in USD/CHF may be in the offing. The steady growth in net-long positions over different timeframes strengthens this bearish contrarian viewpoint.

Important note: While contrarian signals are insightful, it’s crucial to integrate them into a broader trading approach that considers additional technical and fundamental factors.

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Forex Indicators Decoded: Understanding the Market Using Simple Moving Averages (SMAs)

Understanding the Market Using Simple Moving Averages (SMAs)

Learn how to identify trends and support and resistance levels by using simple moving averages (SMAs)

Simple Moving Averages (SMAs) can be a powerful tool for traders and can be used to navigate the complexities of the forex market, helping you make more informed trading decisions.

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What are Simple Moving Averages (SMAs)?

A price chart on a forex trading platform can look like a tangled web of lines and highs and lows. SMAs act like a filter, smoothing out this short-term noise:

  • An SMA calculates theaverage price of a currency pairover a chosen period (e.g., 50 days, 200 days).
  • This average is plotted as a line on the chart, reflecting thegeneral price trendover that period.
  • By using different timeframes (short-term, long-term), traders gain insights into various aspects of market movement.

Why Use SMAs in Forex Trading?

SMAs may seem basic, but their simplicity belies their power. Here’s why every forex trader should consider using them:

  • Identifying Trends:The slope of the SMA line (upward, downward, or flat) can indicate the prevailing trend. This helps traders decide whether to buy (uptrend) or sell (downtrend).
  • Support and Resistance:SMAs can act as dynamic support and resistance levels. When the price approaches the SMA from below, it might find resistance and fall back. Conversely, a price approaching the SMA from above might face support and bounce back.
  • Visual Clarity:By smoothing out price fluctuations, SMAs provide a clearer picture of the overall market direction compared to the raw price chart.
  • Easy to Use & Customizable:SMAs are readily available on most forex trading platforms and require minimal technical knowledge. Furthermore, traders can customize the timeframe of the SMA to suit their trading style and strategy.

EUR/USD Daily Chart – April 9th 2024

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Advanced Strategies with SMAs

While powerful on their own, SMAs can be even more effective when combined with other technical analysis tools:

  • Crossovers:When a short-term SMA crosses above a long-term SMA (golden cross), it can signal a potential buying opportunity. Conversely, a death cross (short-term SMA falls below long-term SMA) might indicate a selling opportunity.
  • Multiple SMAs:Using a combination of short, medium, and long-term SMAs can provide a more nuanced view of the market trend and potential turning points.

Optimizing Your Trading Strategy with SMAs

Remember, SMAs are lagging indicators, meaning they react to past price movements. Here’s how to optimize your strategy using SMAs:

  • Combine SMAs with other indicators:Use other technical indicators alongside SMAs for confirmation signals and a more comprehensive market understanding.
  • Consider different timeframes:Experiment with different SMA lengths to find the timeframe that best suits your trading style and the specific currency pair you’re trading.
  • Practice and adapt:Test your strategy on a demo account before risking real capital. Market conditions change, so be prepared to adjust your approach based on ongoing analysis.

​​​​​Dow, CAC40 and Nikkei 225 Begin to Push Higher

Dow Jones, CAC 40, and Nikkei 225 – Prices, Charts, and Analysis

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​​​Dow stabilises on a quiet day

​The index slumped last week but saw buyers on Friday in the wake of the payrolls report. A quiet session on Monday saw little movement, but crucially buyers have been able to prevent any further short-term downside.​A close back above 39,000 could help suggest that a low is in place, and might then result in a push towards 40,000.

​39,500 has acted as an area of support since mid-February, so a close below this could mark the start of more short-term weakness.

Dow Jones Daily Chart

CAC 40 looks for further gains

​Friday and Monday saw the index recover after dropping back at the end of March. ​A higher low appears to have been created and remains in place unless the price can manage a close back below 8000 and below the previous highs around 7977.

​Additional gains would target the highs from the end of March at 8260.

CAC 40 Daily Chart

Market sentiment shifting? Our exclusive data gives you the edge. Make informed trades with confidence.




of clients are net long.




of clients are net short.

Change in Longs Shorts OI
Daily 21% 5% 8%
Weekly 30% -3% 3%

Nikkei 225 heads higher

​After bottoming out last week the index has made further gains, opening above the 50-day simple moving average (SMA).​Additional upside would see the price head towards the March highs at 41,160, while above this the price will move into new record high territory.

​​A higher low has been created, maintaining the bullish view, and it would need a close below 38,760, last week’s lows, to open the way to the early March lows at 38,280.

Nikkei 225 Daily Chart

FTSE 100, DAX 40 and Nasdaq 100 Regain Some of Last Week’s Lost Ground

FTSE 100, DAX 40, S&P 500 Analysis and Charts

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​​​FTSE 100 tries to stabilize

​ ​The FTSE 100 on Thursday tried to overcome the 8,000 mark but didn’t manage to do so before slipping to 7,856 until a post Non-Farm Payrolls recovery rally took the index back above the 7,900 level. ​While the two-month uptrend line at 7,871 underpins, together with last week’s 7,856 low, a stabilizing move to the upside may unfold.

​A fall through Friday’s low at 7,856 would put the December to mid-March highs at 7,786 to 7,769 back on the map, though.​Minor resistance remains to be seen at the 22 March high at 7,962.

FTSE 100 Daily Chart

DAX 40 regains lost ground

​The DAX 40’s bounce off Friday’s low at 18,086 post much stronger-than-expected US employment data is taking the index to Tuesday’s 18,258 low. Further up Thursday’s high at 18,429 and the breached February-to-April uptrend line, now because of inverse polarity a resistance line, at 18,442 may cap.

​ DAX 40 Daily Chart

See how changes in Retail Sentiment can affect price action




of clients are net long.




of clients are net short.

Change in Longs Shorts OI
Daily 30% 12% 15%
Weekly 36% -8% -2%

Nasdaq 100 recovers from a two-week low

​The Nasdaq 100’s corrective move lower took it to Friday’s trough at 17,866 before strong US employment data propelled it to Friday’s 18,211 high. This level represents an immediate upside target while support sits around Tuesday’s 17,997 low.

​More significant support can be found between the 55-day simple moving average (SMA) at 17,894 and last week’s low at 17,866.

Nasdaq100 Daily Chart

​​​FTSE 100, DAX 40 and Nasdaq 100 Drop on Pared Back Rate Cut expectations​​​

FTSE 100, DAX40, Nasdaq 100 Analysis and Charts

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​​​FTSE 100 retested but was then rejected by the 8,000 region

​The FTSE 100 on Thursday tried to regain the 8,000 mark but fell just short of this level before dropping towards its March-to-April uptrend line as some Fed officials raised doubts on the timing of potential rate cuts this year.

​The two-month uptrend line at 7,856 has been probed in early morning trading ahead of today’s key US Non-Farm Payrolls report.​A fall through Friday’s intraday low at 7,856 would put the December to mid-March highs at 7,786 to 7,769 back on the cards.

​Minor resistance can be encountered at the 22 March high at 7,962.

FTSE 100 Daily Chart

DAX 40 drops to one-week low

​The DAX 40 reversed lower on Tuesday and so far slid to Friday’s intraday low at 18,119 ahead of key US employment data. Below this level, support can be found around the 18,044 mid-March high and the 18,000 region.

​Minor resistance is seen at Tuesday’s 18,258 low. ​Above it minor resistance sits around the 27 March low at 18,382.

DAX 40 Daily Chart

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Nasdaq 100 hits two-week low

​The Nasdaq 100’s corrective move lower gained traction on Thursday as Fed official’s speeches led to rate cut expectations being pared back with the index slipping to the 55-day simple moving average (SMA) at 17,877 which offered support. Below it the late February and March lows at 17,791 to 17,762 offer support, a fall through which would put the late January high at 17,668 on the cards.

​Minor resistance above Tuesday’s 17,997 low comes in at the 18,157 late March low.

Nasdaq 100 Daily Chart

Euro Forecast and Sentiment Analysis: EUR/USD, EUR/CHF, EUR/GBP, EUR/JPY

Most Read: Market Q2 Forecasts – US Dollar, Gold, Euro, Oil, Bitcoin, Yen, Equities Outlooks

Trading often tempts us to follow the herd – buying when everyone else is buying, and selling in a frenzy of fear. But savvy traders understand the potential hidden in contrarian strategies. Indicators like IG client sentiment offer a unique window into the market’s collective mood, revealing instances where overwhelming optimism or pessimism can signal a potential reversal.

Of course, contrarian signals aren’t a crystal ball. They shine brightest when used to enrich an already robust trading strategy. By combining contrarian insights with careful technical and fundamental analysis, traders gain a richer understanding of the forces driving the market – forces that the crowd might easily overlook. Let’s explore this concept by examining IG client sentiment and its potential impact on the euro across four key FX pairs: EUR/USD, EUR/CHF, EUR/GBP, and EUR/JPY.

Want to stay ahead of the EUR/USD’s next major move? Access our quarterly forecast for comprehensive insights. Request your complimentary guide now to stay informed on market trends!

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EUR/USD FORECAST – MARKET SENTIMENT

IG data reveals a slight but fading bullish bias towards the EUR/USD among retail traders. Currently, 53.15% of clients hold net-long positions, resulting in a long-to-short ratio of 1.13 to 1. This positive tilt has weakened significantly, with net-long positions down a substantial 10.90% compared to yesterday, despite a tiny 0.05% increase over the week. Mirroring this, net-short positions surged by 31.26% since yesterday and are up 11.10% over the week.

Typically, a net-long stance hints at potential declines from a contrarian perspective. But, the recent shift in sentiment complicates the outlook. While a slight majority still favors the upside, the growing number of traders leaning bearish could signal an impending bullish burst for EUR/USD.

All in all, EUR/USD presents a mixed picture. It’s essential for traders to proceed with caution and not rely solely on sentiment. These insights should be combined with thorough technical and fundamental analysis for a well-informed trading strategy.

A graph of a stock market  Description automatically generated with medium confidence

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EUR/CHF FORECAST – MARKET SENTIMENT

Data from IG reveals clients are bullish on EUR/CHF, with 53.08% of traders currently holding net-long positions. This results in a long-to-short ratio of 1.13 to 1. However, sentiment appears to be weakening, with net-long positions down 3.10% since yesterday, even while they’ve increased by 8.70% compared to last week. Mirroring this, net-short positions are up 12.18% from yesterday but down 6.75% compared to last week.

Our typical contrarian approach suggests EUR/CHR could be in for a pullback. However, the recent weakening of buying positions on the pair and the mixed timeframe comparisons create a less confident outlook.

Overall, the EUR/CHF presents a complex picture based on current sentiment. While there may be some downward pressure, the lack of a strong contrarian signal warrants caution. As always, traders should consider these clues within a broader technical and fundamental analysis framework before making any trading decisions.

A graph of a stock market  Description automatically generated with medium confidence

Eager to uncover how retail positioning may shed light on EUR/GBP‘s directional path? Dive into our sentiment guide for invaluable insights into market psychology as a trend indicator. Download it now!




of clients are net long.




of clients are net short.

Change in Longs Shorts OI
Daily 0% 1% 0%
Weekly -9% -6% -8%

EUR/GBP FORECAST – MARKET SENTIMENT

Based on IG data, the sentiment surrounding EUR/GBP within the retail crowd appears optimistic, with 61.22% of traders maintaining net-long positions. This equates to a long-to-short ratio of 1.58 to 1. Nevertheless, this bullish stance is beginning to wane, as net-longs have declined by 1.80% since yesterday, despite a 4.95% jump over the past week. In contrast, net-shorts experienced a large 9.01% surge from yesterday but demonstrate a more consistent decrease of 12.00% versus last week’s levels.

Traditionally, substantial net-long positioning might indicate potential losses for the underlying asset from a contrarian standpoint. However, recent shifts in market positioning have clouded the clarity of this signal. Presently, EUR/GBP appears to be caught amidst conflicting forces. While contrarian indicators still suggest some downward pressure is probable, the absence of a robust, enduring trend renders it a less assured prediction.

A graph of a stock market  Description automatically generated with medium confidence

Intrigued to learn about the outlook for EUR/JPY? Dive into our second-quarter forecast for comprehensive insights. Get yours today!

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How to Trade EUR/USD

EUR/JPY FORECAST – MARKET SENTIMENT

IG data reveals a strong bearish bias towards the EUR/JPY, with 73.47% of traders currently holding net-short positions. This translates to a significant 2.77 to 1 short-to-long ratio. Notably, the number of net-short positions has climbed by 7.11% since yesterday and 1.73% compared to last week. However, net-long positions have also surged, up 25.13% from yesterday and a notable 18.78% from last week.

Our contrarian approach suggests this heavy net-short positioning could be a positive sign for the EUR/JPY. Yet, the recent weakening of the bearish bias introduces a degree of uncertainty. While the contrarian perspective still points to potential gains for the pair, the increasing number of long positions over key timeframes warns that a trend shift may be imminent.

As always, traders should carefully integrate sentiment signals with a well-rounded strategy that includes thorough technical and fundamental analysis.

A graph of a stock market  Description automatically generated with medium confidence