Everybody short? Okay, time to squeeze!
Cable is zooming for no apparent reason, triggering stops above the 1.6350 level. Lack of follow-through after this morning’s break of 1.6285 is the logical reason for traders to cover, but there appears to be little fundamental justification. The market still expects a fresh dose of QE on Thursday, probably GBP 25 bln worth.
Traders say there is demand for the pound at the upcoming 16:00 GMT fixing, but they may just be trying to pin a cause on the effect of a stronger pound.
Long-time readers know I would rather perform auto-dentistry than trade cable, so I say you get what you deserve if you dabble.
Cable trades now at 1.6385.