BUZZ-COMMENT-BoE looms as sterling bulls retreat ahead of March's 1.3200 high

Credit: REUTERS/LEONHARD FOEGER

Sterling opened Monday's U.S. session in less august fashion than it ended July, off overnight highs above 1.3100, as the dollar paused after last month's 4% drubbing and traders pondered the upcoming BoE meeting for pound-specific influences.

July 29 (Reuters) - Sterling opened Monday's U.S. session in less august fashion than it ended July, off overnight highs above 1.3100, as the dollar paused after last month's 4% drubbing and traders pondered the upcoming BoE meeting for pound-specific influences.

Sterling drafted on EUR/USD strength during the dollar's July decline, ignoring stalled EU-UK trade negotiations, a dismal UK economy and hints at negative rates in the near-term.

Instead, the market focused on rising U.S. COVID-19 cases, the falling U.S. rate outlook and Congress' failure to extend U.S. economic aid.

Despite GBP/USD's rise from 1.2252 on June 29 to Friday's high at 1.3170, sterling IMM spec short positioning grew to -25,409 contracts as of July 28 1096742NNET.

GBP/USD bulls remain in control, though today's move back below the upper 30-day Bolli at 1.3069 helped bears. Daily moving averages starting with the 10-DMA at 1.2901 down to the 100-DMA at 1.2433 provide support. GBP/USD bulls need a rise above early-March highs by 1.3200 to resume the uptrend.

Otherwise, bears may refocus on UK-related issues and drive the pound through DMA support toward June lows by 1.2252.

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GBP Chart: https://tmsnrt.rs/3goC9WF

(Paul Spirgel is a Reuters market analyst. The views expressed are his own)

((Paul.Spirgel@thomsonreuters.com))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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