After Brexit, the correlation between the pound and the base index in the country continue to be negative or opposite. As the pound falls, the index heads higher. Even after the game changing news for the exit of the UK from the Euro zone, the correlation continue to exist.
If the GBP halts its fall, due to the weak dollar and continue to climb higher, then we might see lower levels and/or correction of the FTSE. The negative sentiment and record short positions might get squeezed out by the market, as the negative news are already priced in. But if the index continue to go higher, then we possibly can expect continuation of the pound short move.
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