British Pound Surges Higher On Corporate Buying and Short Covering

Cable rifled higher on corporate related demand, with heavy U.K. clearer order flow lifting the pair to the 1.7550 area versus earlier lows of 1.7448. Short covering activity also contributed to the move, with price action following its eurozone counterpart. Heavy gamma related activity was noted below the 1.7500 handle, which led to some delta rebalancing and may have aided the Cable rally, although risk is firmly skewed to the downside. Near-term resistance at 1.7585 and 1.7615 are expected to encourage more short positioning, although the potential for price swings beyond these parameters is high given the range of U.S. data today, which includes July trade, August import and export data and weekly jobless claims.