Closed in NY at $1.5676, off lows at $1.5671, seen after rate had extended its corrective pullback off post UK CPI release highs of
$1.5730. The move down was seen influenced by the general boost for the USD provided by the release of stronger than forecast retail sales data. Cable continued to take direction from EUR/USD in Asia, as the cross was contained within stg0.7860/68, with rate initially squeezing to lows of $1.5669 before pushing up to $1.5680 into the Tokyo fix. With little corporate interest, due to Obon week, the expected Goto-bi day demand failed to materialize and spec longs were forced to cover. This move pressed cable below its earlier low, extending the base to $1.5664 before rate settled back between $1.5670/75 ahead of the European open. BOE Minutes and employment data due for release at 0830GMT and will provide the domestic focus, with US inflation data at 1230GMT the interest into the afternoon. Cable demand seen from $1.5664 through to $1.5650, a break to open a deeper move toward $1.5635/30 ahead of stronger interest into $1.5600. Resistance $1.5680 ahead of $1.5695/00.
EasyForexNews Research Team