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Aug 03 - 07:55 AM

GBP/USD - COMMENT-GBP/USD Bulls Hope To Squeeze More Pips Out Of Shorts

By Rob Howard  —  Aug 03 - 05:45 AM

Sterling bulls hope a new month ushers in a fresh squeeze on cable short positions, after the pound rose 5.5% against the U.S. dollar in July -- its biggest monthly gain since May 2009.

Month-end buying of sterling, and GBP short-covering, helped inflate cable to a 21-week high of 1.3170 on Friday.
A few hours later, CFTC data showed IMM speculators upped their net GBP short position to an eight-week high in the week to July 28 nL1N2F504Z.

More stops on GBP/USD shorts may be sheltering north of 1.3210 -- a level above which cable has not traded since Jan.
2.
The March 9 high was 1.3200, before cable slumped to a 35-year low of 1.1413 less than a fortnight later; 1.3210 marked the traded highs on Jan.
31 and Jan.
7.

This week's key UK event risk is the Bank of England's monetary policy announcement on Thursday (at 0600GMT) nL5N2F19J9.

Related comment: nL2N2EO0AO

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Source:
Refinitiv IFR Research/Market Commentary

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