The pair closed in NY Monday at $1.6141 after rate had stepped its way to a session low of $1.6125 on the back of decent demand for euro-sterling, which for the second day running closed above its 200-dma. This moving average comes in today at stg0.85368. Positioning for ‘usual’ end of month euro-sterling demand was seen as the main driver, with cable feeling the effects, though most reports Monday did suggest that traders would prefer to buy cable dips into the $1.6100-1.6050 area, placing stops below $1.6000. End of month models tend to show cable demand to emerge at fixings. Cable consolidated between $1.6130/45 in early Asian trade before getting shoved through support in the $1.6115/00 area, with triggered stops dropping the rate to overnight lows of $1.6063. Move again driven by euro-sterling demand as the cross spiked to stg0.85725. The cross eased off, meeting support at broken resistance at stg0.8555, touched a recovery high of stg0.8568 before turning lower and extending its corrective pullback to stg0.8550. This correction allowed cable to recover back above $1.6100, edging to $1.6120 before settling between $1.6100/20 ahead of Europe. UK lending data at 0930GMT provides the morning interest.
