Correlation between the British currency and oil | 14 Desember 2021

14 Desember 2021, GBP/USD

Correlation between the British currency and oil

GBPUSD trading plan:

Hedge fund selling of oil futures and options slowed in the most recent week, after a tidal wave of selling the week before, probably indicating the liquidation cycle is near its end. Hedge funds and other money managers sold the equivalent of 20 million barrels in the six most important futures and options contracts in the week to Dec. 10, down from 125 million in the week to Dec. 3. The ratio of bullish long positions to bearish short ones in the crude benchmark has fallen to just 2.7:1, while inflation-adjusted prices are now in line with the long-term average. The combination of well-below average positioning and near to average real prices is likely to make this a relatively attractive entry point for hedge fund managers – provided the upsurge in coronavirus cases does not push the global economy back into recession. A positive signal for the British currency and oil, as assets correlate with each other.

Investment idea: buy 1.3193 and take profit 1.3262.

David Johnson
Analyst of «FreshForex» company
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