GBP futures: upside could be limited

CME Group’s preliminary figures for open interest in GBP futures show traders continued to trim contracts albeit at a lower pace on Thursday. Open interest contracted from near 270K contracts on Tuesday to 257,859 contracts on Wednesday and Thursday’s 257,285 contracts.

Up move could run out of legs

Rising prices in Cable since Tuesday’s fresh lows in the 1.2630 region could lack of sustainability from the futures markets, as diminishing open interest could be signalling the upside remains fuelled by short-covering instead of fresh buyers. In such scenario, prices are expected to resume the downside once short-covering ends.