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GBP/USD Higher for Fourth Session as Market Trims Shorts Pre-BoE

GBP
  • GBP continues to trade well, with GBP/USD higher for a fourth consecutive session and topping first resistance at the 100-dma in overnight trade. This level switches from resistance to support, crossing at 1.3515 today.
  • Markets held a net short GBP position in the most recent CFTC data, with the rally off the January lows of 1.3358 possibly marking a short squeeze as traders position for Thursday's BoE decision. The bank are expected to raise rates by 25bps to 0.5% - and possibly signal a stronger tightening cycle throughout 2022.
  • The pair has also benefited from the greenback weakness evident in recent sessions, but EUR/GBP also remains under pressure. The broader trend in the cross remains down and a resumption of weakness would open 0.8282/77, the Feb'20 and Dec'19 lows and the multi-year range base at 0.8300.

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