GBP: A Sharp Rally Ahead?
Cable pushes higher as yen sellers return It's been an up n down day for the pound but as yen sellers return on higher oil and equities its GBPJPY that's leading the way now up through 157.08.
EURGBP has struggled to make much headway all morning and that pressure has now taken it down through 0.7900 to test the next support at 0.7880.
GBPUSD now up through 1.4350, triggering stops to post 1.4375 before retreating. Another strong tranche of offers between 1.4390-1.4400 the next obstacle.
USDJPY has good exporter sell interest at 109.50 and has pulled back to 109.36 from 109.44 highs.
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Short exposure in the GBP remains at an extreme according to BNP Paribas FX Positioning Analysis.
The UK data calendar picks up later in the week with the release of the February employment report (Wednesday) and March retail sales (Thursday).
In light of short GBP positioning and cheap GBP valuation, we remain of the view that if sentiment turns more positive around the UK outlook there will likely be a sharp rally in the currency.