The pair closed in NY Tuesday at $1.6944 after rate had recovered off extended lows of $1.6933. Overall dollar strength pressed the rate lower through Tuesday’s session, the release earlier in the day of stronger than forecast UK mortgage approvals data brushed aside. Rate marked lows in early Asian trade at $1.6944 before edging higher, the rate marking highs at $1.6956 before move faltered and it drifted off to $1.6947 ahead of the European open. Euro-sterling was confined to a tight stg0.7911-0.79145 range in Asia with most moves dollar driven. A light UK calendar today with most attention on US ADP(ahead of Friday’s NFP), US Q2 GDP and tonight’s FOMC announcement. Ahead of this the market will turn focus on Germany CPI state/national releases. Sterling still holding on to its underlying positive tone, despite the recent pullback in cable, but traders begin to suggest that a break of $1.6900-1.6870 could begin to negate this outlook. However, the recent bearish tone in euro-sterling remains though we could see some end month demand to counter. Cable demand now seen at $1.6933, stronger into $1.6920. Resistance $1.6956 (38.2% $1.6994-33) ahead of $1.6964 (50%) and $1.6971-80(61.8%-76.4%).
