Sterling Futures Show Bulls committed for a 1.4650 Breakout
Preliminary data from the CME Group shows that futures traders continue
to add new long-sided business in the 6G contract (GBP/USD) this week,
as the Sterling heads towards 1.4650 and possibly beyond, which if
materialized, will set the highest level for the pair since Jan 6th.
GBP longs happy to keep adding as 1.4650 comes into focus
The increase in open interest* on Thursday, Jan 29th, with nearly 4k new contracts added in a day that concluded with a strong bullish candle, strengthens the view that on the lead-up to a potential breakout of 1.4650, the momentum and interest to be part of the long-side campaign remains strong. The new contracts added in the futures market should be interpreted as true demand by large players.
*Note, if instead of an increase in open interest in the 6G contract yesterday, we had seen a negative reading, that implies a withdrawal of liquidity, via shorts GBP closing their positions, also referred as short squeeze; when that occurs, despite the appreciation, it has no substance/commitment behind, unlike yesterday's GBP futures activity.