I feel I've improved on their original headline of "GBP: Sub-1.30 Sell-Off To Extend Further; Staying Broadly Bearish"
BNPP say that the sell off in the quid will extend further now we're below 1.3000 and they remain bearish.
"We remain broadly bearish on Sterling. Short GBP positioning was squeezed considerably over the past month, from -46 to -34 according to BNP Paribas FX Positioning Analysis, as UK data surprised to the upside."
The have a fair value model (STEER) that's signalled that the above positioning squeeze had pushed sterling beyond the short-term fair value, which currently stands at 1.2896. You can decide whether their STEER is a bum one or not.
You can get more on this from eFX News
Today's failure to hold above 1.30 keeps the bearishness intact for now but sellers will want to see a push through the lows of the last couple of days. The Fed might be the kicker for that or the reason why we go back up. The question will be what happens after?
