Oct 27 (Reuters) - GBP/USD traded within a narrow range as risk factors such as Brexit talks and the U.S. election loomed too far over the very short-term horizon, and the pound could remain supported until those issues are closer to a resolution [nL1N2HI1BE].
The pound derived some support from EUR/USD sales as rising European COVID cases call into question expectations of higher EU growth and inflation.
Recent CFTC IMM spec data indicates stretched EUR longs have begun to unwind. EUR IMM longs 1099741NNET have diminished steadily from 211,752 contracts at the end of August to 165,943 contracts as of Oct. 20.
Over the same period, cable positioning 1096742NNET has dipped near 10,000 contracts and more recently specs have been buying GBP/USD dips, taking net positioning near flat.
Sterling finds support near its 10-day moving average by 1.3005, then the current daily cloud twist by 1.2980. A move below the cloud would allow a test of the 30-DMA by 1.2929 and then the 100-DMA by 1.2865.
A Brexit or U.S. aid deal will likely lift the pound above its recent trend high at 1.3177, putting the August peak at 1.3481 in focus. For more click on FXBUZ
GBP Chart: https://tmsnrt.rs/35yz81W
IMM GBP-EUR Positioning Chart:https://tmsnrt.rs/3mqZB8n
(Paul Spirgel is a Reuters market analyst. The views expressed are his own)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.