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GBP: Weakness Accelerates on Step Through Fib Level, EUR/GBP Nears 50-dma

GBP
  • Downleg in GBP/USD extends further in recent trade, with 1.2850 support giving way as well as the more notable 50% retracement of the July upleg at 1.2830. 
  • Move initially triggered by the USD buying phase and modest risk-off evident in equity futures, but GBP is now underperforming against all others in G10 - with demand for EUR/GBP putting the cross just a few pips below the 50-dma of 0.8461. Clearance here would be the first since early May. 
  • GBP may be more pre-disposed to S/T positioning clearouts given the sizeable net long position detailed in Friday's CFTC report - outright positioning rose further, hitting +142k and, once again, the largest net long in the series (more on this later). 
  • As noted above, focus on this week's BoE meeting is preceded by Chancellor Reeves' statement on public finances later today, making for a likely volatile week in the currency. 

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