GBP: More topside to come across the board

Another strong move in GBP over the last 12 hours with massive short positions, particularly from the real money community, surely feeling some stress ahead of the NFP data. Nobody ever went broke booking profits and I suspect that we are seeing some positional adjustment in all of the GBP crosses.

GBP/JPY has been the leader in this bounce, just as it was on the way down. Momentum is starting to pick up and another leg higher towards a previous congestion area around 140 would not surprise. With USD/JPY starting to run into heavy corporate offers, I expect most of the gains from here to come via cable.

Trading aggressively around NFP numbers is a mugs game. Anything can happen in the 4 hour window either side of the number so I prefer to keep my small long position in cable and trade any, hopefully volatile, range from a bullish perspective.

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