The GBP has been very interesting this week due to the very heavy turnover particularly during European trade. Asset managers, reserve managers and real-money funds have been using each small 50 pip dip to buy sterling and the bigger banks that I speak with are all bullish. That said, US corporates have been selling plenty and that has led to heavy turnover.
The short-term range seems now pretty clear between 1.6185 and 1.6265 but the bulls do seem still to be in overall control so I prefer the bullish bias now. There are heavy stops in cable above 1.6315 and in EUR/GBP below .7910, and if both go off together then we will certainly see some gaps. Range trading during Asia looks the likely outcome but don’t get caught short if it breaks higher!