The pair closed in NY Thursday at $1.6037 after recovering from a session low of $1.6006 to $1.6070 as attention was turned toward the euro sell off following the release of much softer than forecast inflation data. Euro-sterling extended its corrective pullback from recent highs of stg0.8585 to stg0.8461, the move providing buoyancy for cable through the session and allowing this rate to counter the dollar positive react to the release in the afternoon of a strong Chicago Report. Cable eased to $1.6032 ahead of the close with the recovery from here extending in early Asia to $1.6046. This recoverywas again aided by further slippage in euro-sterling, the rate easing on to lows of stg0.84525. Support for the cross ahead of stg0.8550 saw cable ease off its recovery highs, easing back around $1.6030 ahead of the European open. UK manufacturing PMI data due at 0928GMT and will provide the main domestic focus (f’cast 56.4 vs last 56.7). For the afternoon, US PMI and ISM data will provide interest. Fed Bullard speaks at 1310GMT. Cable resistance $1.6070/80, a break expose $1.6100 ahead of $1.6120. Support remains into $1.6000, with stops noted below $1.5990. Further demand into $1.5980 (76.4% $1.5894-1.6258).
