The pair closed in NY Tuesday at $1.6683 having recovered off its post UK CPI react lows of $1.6655 (holding off a retest of Friday lows of $1.6645 with traders awaiting the post data dip to re enter longs) to $1.6728. Rate drifted lower through the NY afternoon, touching base at $1.6676 before edging higher into the close. Rate initially marked lows in Asian trade at $1.6677 before rate moved up in tandem with euro-dollar to $1.6697. However, offers placed into $1.6700 provided a counter and rate settled back between$1.6680/90 into the Asian afternoon before picking up fresh demand ahead of the European open that has seen it retest the earlier highs at $1.6697. Euro-sterling, which extended its recovery off recent lows of stg0.8157 to a high Tuesday of stg0.82495, extended this recovery to stg0.82545 as cable continued to lag euro-dollar’s stronger recovery. The cross was contained in Asia between stg0.8245/0.82545. Focus today turns to UK employment and BOE Minutes at 0930GMT and to provide next directional impetus. Sterling remains in favour though traders continue to look for better long entry levels (buy dips). Support $1.6655/45, resistance $1.6700-15 ahead of $1.6730.
