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BUZZ-COMMENT-GBP/USD bulls hope to squeeze more pips out of shorts

Credit: REUTERS/LEONHARD FOEGER

Sterling bulls hope a new month ushers in a fresh squeeze on cable short positions, after the pound rose 5.5% against the U.S. dollar in July -- its biggest monthly gain since May 2009.

Month-end buying of sterling, and GBP short-covering, helped inflate cable to a 21-week high of 1.3170 on Friday. A few hours later, CFTC data showed IMM speculators upped their net GBP short position to an eight-week high in the week to July 28 .

More stops on GBP/USD shorts may be sheltering north of 1.3210 -- a level above which cable has not traded since Jan. 2. The March 9 high was 1.3200, before cable slumped to a 35-year low of 1.1413 less than a fortnight later; 1.3210 marked the traded highs on Jan. 31 and Jan. 7.

This week's key UK event risk is the Bank of England's monetary policy announcement on Thursday (at 0600GMT) .

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(Robert Howard is a Reuters market analyst. The views expressed are his own)

((robert.howard@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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