GBP/USD: Leveraged Longs Below Average; Scope For Modest Gains Ahead - MUFG

MUFG Research discusses GBP/USD outlook and expects some modest gains in the near-term.
"Even after yesterday’s appreciation, GBP/USD remains 7.5% lower than the peak set in April and we continue to expect a period of consolidation at these levels with scope for some modest appreciation if the data is viewed as consistent with a rate hike in August.

That remains our call at this stage and with leveraged long GBP speculative positioning as a percentage of open interest below average, we see scope for some modest GBP gains ahead. Option flow data also indicates recent more extreme negative GBP sentiment," MUFG argues.