GBP/USD: Short covering and seasonal factors could keep Cable in the ascendancy this week – SocGen

Sterling carried over positive momentum from Q1 to April, resulting in GBP/USD crossing 1.25 for the first time since last June. Economists at Société Générale expect the pair to extend its race higher.

Further uptrend likely

“Hedge funds trimmed short GBP positions to 6.5% of OI last week, the lowest since the end of December. Short covering and seasonal factors could keep Cable in the ascendancy this week provided US CPI does not surprise to the upside.”

“Next potential hurdles are at projections of 1.2610 and 1.2750.”

“Defending last week's low at 1.2270 is crucial for persistence in up move.”