Explore eFXplus Derived Data That Drive Results
A Data Partner of:
Refinitiv
Mar 29 - 11:55 AM

GBP/USD - COMMENT-Sterling Reprieve May Be Short Lived If 10-DMA Resistance Holds

By Paul Spirgel  —  Mar 29 - 10:25 AM

GBP/USD met with rejection as it advanced close to the 10-day moving average on Tuesday, indicating initial limits to its recovery potential even as it received a boost from markets' hopeful reaction to the latest round of Ukraine-Russia peace talks nL2N2VW0ZZ.

Though out of immediate danger after bouncing off its early NorAm low of 1.3061 -- thus avoiding a return to the European trough of 1.3057 -- failure at the 10-DMA, near 1.3171 may allow bears to reload shorts for another attempt at 2022 lows by 1.30.

Below there, the early November 2021 low at 1.2845 would beckon.

Positioning might diminish downward inertia, with GBP/USD IMM specs as of March 22 net short 37,244 contracts 1096742NNET, the largest short since early-January 2022.

But risk-sensitive cable faces multiple challenges, not least from sentiment surrounding the Ukraine crisis, with more twists and turns possible even if a resolution eventually emerges.

Also, despite the relatively large GBP net short, it is worth noting that the last time the BoE shifted to a less-hawkish stance -- following the November MPC meeting, spec short positioning grew to -57k, well above current levels.

Meanwhile, UK rate hike expectaions remain a hindrance, with the recent moderation in hawkish BoE expectations eroding the strength that sterling enjoyed earlier in the year.

For more click on FXBUZ


GBP Chart: Click here

Source:
Refinitiv IFR Research/Market Commentary

Subscription

  • eFXplus
  • End-user license agreement (EULA)

About

  • About
  • Contact Us

Legal

  • Terms of Service
  • Privacy Policy
  • Disclaimer
© 2022 eFXdata · All Rights Reserved
!