The pair closed in NY Monday at $1.7084 after sterling had come under pressure into the US session on reported position adjustment ahead of today’s key UK CPI release (0830GMT; median 1.6% y/y vs last 1.5%). Rate had seen highs earlier in the day of $1.7144, before settling around $1.7110/15 into NY, with strong demand for euro-sterling (seen as the main driver), that took this rate through its 21-dma, triggering stops to take it on to stg0.7981 which in turn pressed cable down to challenge support at $1.7070. Recovery efforts in cable have been restricted to the $1.7090 area (Asia range $1.7078-91) in NY and Asia, with rate currently trading around $1.7083 into Europe. Euro-sterling consolidated its recovery with trade overnight contained by stg0.7970-0.79755. Offers in the cross noted between stg0.7980/85 with talk of more stops placedabove. A break to open a move toward stg0.8000, though traders will still look to fade rallies. In cable, demand noted between $1.7070-60 (covering Jul14 low $1.7070 and $1.7065-64 23.6% $1.6693-1.7180-Previous high) with trailing stops said to begin below $1.7055. Resistance remains toward $1.7100, stronger between $1.7107-16 (50%-61.8% $1.7144-1.7070).
