GBP Shorts Soar on BoE Decision and Oil-Fueled USD Rally

GBP net shorts have jumped by over 40% to their highest levels since August, indicating a more bearish market stance towards the currency. This shift in sentiment comes as the Bank of England kept its policy rate steady at 3.75% on September 18, matching expectations.

The recent oil-driven USD rally has also contributed to sterling's weakness, with Brent crude oil prices pushing past $82 per barrel and driving the US Dollar Index (DXY) toward 103.80. This fundamental divergence is expected to put pressure on the Pound over the next few weeks.

To capitalize on this setup, traders are advised to favor GBP/USD put options and selling GBP futures contracts, with tight stop-losses placed above August highs to guard against a sudden short squeeze.