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Forex Flash: Next Target in the GBP/USD short squeeze is 1.5200/20 - BBH

FXstreet.com (San Francisco) - After reaching 10-day highs at 1.5175, the GBP/USD has retraced to the 1.5110 level and currently is trading in consolidation mode in a 1.5110/40 range. The pair is trading at 1.5115, 0.21% and the pair is inside a slightly bullish trend according to the Fxstreet.com Forex Studies.

BBH's head of global currency strategy Marc Chandler, points that the BOE Governor King "now sounds downright optimistic about the UK's economic outlook, would under other conditions been shrugged off as unfounded optimism."

According to Chandler, one of the reason could be the lower Sterling. Chandler comments that "the idea that the MPC was not looking to push sterling lower is a bit of hair splitting as the public record clearly shows the MPC had previously complained about sterling strength and has welcomed it weakness." In any event, "the next target for the short squeeze in sterling is $1.5200-20," states BBH analyst. "

"Note that if sterling finishes the North American session today above $1.5120," Chandler remarks, "it would close above its 20-day moving average for the first time since January 2."

As for technicals, the CCI and Momentum indicators point bullish while the Stochastic and MACD are neutral in the 1-hour chart. In the 1 day timeframe, CCI and Momentum turn negative while the MACD and Stochastic remain neutral.

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