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For market chartists, sterling looks good

The last trading day of April will deliver a mammoth data dump for traders to absorb.

Japan will present jobs, inflation, industrial production and retail sales reports on Friday. Inflation and money supply are among the statistics on the slate from the eurozone.

But keep an eye on cable, as the sterling/dollar exchange rate is known, as the UK and US release first-quarter GDP reports. For good measure, the US is also throwing in employment cost figures and the University of Michigan sentiment index.

Traders with chartist/technical tendencies may argue that when the dust settles from all these releases the greater risk is for the market to push cable higher, in other words for the pound to strengthen.

As analysts and economists debate whether the pound properly reflects the UK’s economic prospects ahead of Brexit, the currency’s bears are getting nervous, for net positioning in US-traded sterling futures shows the market remains near record short levels.

The jump in sterling since prime minister Theresa May announced a snap election in June has held, and it leaves cable near its highest level since September and back within the trading range seen before the turmoil of October’s flash crash.

Indeed, cable is now nicely above its 200-day moving average and its 50-day moving average is turning higher in an attempt to breach the former.

The consequent “golden cross” may further energise sterling bulls.

jamie.chisholm@ft.com