Have shorts pushed the pound as far as it will go?

As we head to the big BOE MPC announcement, are the shorts at risk from disappointment?

The mighty quid is down 11% since the Brexit vote. The Friday CFTC positioning shows shorts to be at the highest levels ever. With most of the market expecting the kitchen sink from the BOE on Thursday, is there much more downside left for the quid?

GBP CFTC positioning

This market is shorter more pounds than it was during the GFC, the last two general elections and the Scottish vote. Although Brexit is bigger than all of them, there's still a very long road to travel before we get a proper idea of the real impact. These heavy shorts are likely to be spooked very easily if the BOE doesn't act to the level that's expected. We've already undone the manufacturing drop from this morning and that's a sign that maybe traders have extended themselves as far as they dare right now.

Despite the dovish expectations for the BOE event, perhaps we should be on watch for squeezes higher if some shorts get cold feet ahead of the meeting.