A crunch week for the pound could lead to a more aggressive squeeze on sterling shorts.
The latest CFTC numbers show an increase in short positions as Brexit concerns resurfaced and the prospects of negative Bank of England rates attracted fresh selling.
Despite the negatives, GBP/USD has benefited from a weaker dollar and into Friday's close recorded back-to-back bull weeks.
This week sees another round of talks between Britain and the European Union on any possible extension, and although market optimism for an agreement by the end of the month is low, an overly short sterling market is at risk.
Technically, three consecutive monthly hammer candles point to upside cable risk and a return to levels above the 55-MMA, currently 1.3115.
Apart from a false break in December, the average has contained prices since November 2014.
Shorter-term, this week could prove pivotal if the European Union talks reach agreement.
A move above the 1.2466 May 8 high could open up the 1.2644 April 30 peak and 200-DMA at 1.2670.