GBP futures: further pullbacks on the cards

In light of preliminary data from CME Group, open interest in GBP futures markets dropped by around 5.4K contracts on Friday from Thursday’s 216,443 contracts, recording the third consecutive fall in open interest at the same time. Volume followed suit, this time down by almost 28.6K contracts.

GBP/USD: extra weakness likely

Falling volume in combination with open interest and prices is a bearish condition of the market that implies liquidation by investors with long positions. Theoretically, as soon as open interest stabilizes at a lower levels and the liquidation has run its course, prices should be in fresh conditions to resume the previous up trend.

In addition, GBP remains under extra pressure amidst UK political uncertainty, Brexit concerns and a somewhat dovish BoE (as per its latest meeting).