GBP futures: bearish sentiment prevails

Open interest in GBP futures markets rose by more than 5.6K contracts on Tuesday vs. Monday’s 208,271 contracts, according to preliminary data from CME Group. In the same line, volume increased significantly, reverting the previous drop.

GBP/USD faces further decline

Cable dropped to fresh multi-week lows around 1.2860 on Tuesday largely on the back of softer-than-expected UK CPI figures. Additionally, the recovery in the greenback continues to add downside pressure to spot.

Increasing open interest coupled with rising volume and declining prices are indicative that fresh short positions are being opened. This is a bearish sign, at least until shorts start to cover, turning the stance to bullish in a later stage.