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GBPUSD 1.4500 – Seriously?
Cable has been on a tear this week after bouncing off the 1.4000 level the pair made a very unusual V-shaped recovery mercilessly squeezing the trapped shorts. Although data from the UK has been mediocre at best and Brexit negotiations have not yielded any additional progress, the market does not seem to care.
There appears to be a very sustained bid the in the pair and for now, every dip looks to be a buy. It difficult to say how long such unbridled flows can sustain themselves, but the pair is a clear beneficiary of anti-dollar flows and tomorrow could be a true test of its momentum power if the NFPs disappoint. With the market leaning long on the number as forecasts project anywhere from 175-200K jobs, any serious miss would put the Fed rate hike path in doubt and would fuel even more anti-dollar sentiment. If cable is able to take out the post Brexit highs of 1.4345 then 1.4500 would come into view regardless of the funda picture