GBP: Short-squeezing not evident yet – ING

Sandeep Kanihama FXStreet Contributor

Francesco Pesole, FX strategist at ING, explains that CFTC data referring to the period 9-16 October surprisingly shows a flattish development in GBP/USD net speculative positioning, despite a significant sterling rally in the same period (approximately +4% vs USD), triggered by hopes of a new Brexit deal.

Key Quotes

“We might need to wait for next week’s data to witness some “short-squeezing” effect, but for now, a still extensive short market positioning (-30% of open interest) on GBP tends to suggest more upside room for the currency.”

“Nonetheless, caution on the pound is still much warranted, given that the hurdles to have a deal approved (and ratified) by the UK parliament remain firmly in place.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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