The pair closed in NY Monday at $1.6816 after rate had recovered off a session low of $1.6806 to $1.6845 (21-dma Monday). Rate eased off the highs through the London fix before settling between $1.6810/25 through to the close. Another subdued trading session in Asia saw trade contained within a relatively tight $1.6809/20, dealing around $1.6815 ahead of the European open. Euro-sterling, which had seen recovery highs Monday of stg0.8158 following AstraZeneca’s rejection of the improved Pfizer bid, consolidated between stg0.8151/56 through Asia. UK inflation data due for release at 0830GMT (CPI, RPI, PPI) expected to provide some volatility with forecasts expecting a slight rise in headline and core CPI (1.7%, 1.8% respectively vs 1.6% for both lasttime). ONS house price data also released at the same time and could be of interest considering weekend comments from BOE Carney (9.6% y/y median, 9.1% last). Resistance remains at $1.6845/50 (21-dma still at $1.6845, with the 76.4% retracement of $1.6875-1.6732 at $1.6841 still relavant), a break to open a move toward $1.6875 (May14 high). Support $1.6806-00, $1.6785/75. Euro-sterling bids stg0.8130/20, offers into stg0.8160.
