Closed in NY Friday at $1.6132 after rate had struggled to take advantage of the risk on reaction to the release of weaker than forecast US trade data. The rate had seen an initial spike to $1.6170 on data release, only to fall back to $1.6089 as euro-sterling extended its recent recovery to stg0.8287. Cable recovered to settle between $1.6130/40 into the close, while the cross drifted back to stg0.8272. Cable dipped back to $1.6118 into early Asia, as demand emerged again for the cross that took this rate on to stg0.8298. However, failure to break above stg0.8300 allowed cable to recover and push up to $1.6156, settling between $1.6135/45 ahead of the European open, euro-sterling was holding around stg0.8292. Weak output data Friday in the UK continued to place an anchor on any cable gains, with sterling retaining its underlying soft tone into Asia. A light domestic calendar in the UK Monday will leave rate open to euro moves, with Fed Bernanke speech at 2100GMT seen as the day’s main event. Tuesday brings UK inflation data, though more interest will be seen on retail sales at the same time for any sterling react. Resistance $1.6150/55, $1.6170/80. Support $1.6120, $1.6090.
EasyForexNews Research Team