The pair closed in NY Tuesday at $1.6813 after rate had extended its recovery, off early Europe lows of $1.6757, through the US session to a high of $1.6817. This move was given a boost into and after the 1600BST London fix with market seen positioning for today’s key events, namely UK jobs/earnings data at 0830GMT, with the BOE Inflation Report to follow at 0930GMT. Rate slowly pared gains through the Asian session, drifting off from opening highs around $1.6813 to $1.6801, trading around $1.6805 ahead of Europe. Euro-sterling also reflected this sterling revival as it broke below support Tuesday at stg0.7970, extending the pullback to stg0.7945, holding Asia within a tight range of stg0.7951/54. Trader reports this morning suggest that with the recent mixed data releases the BOE Report could reflect some cooling in the UK recovery, butstill see sterling as a good bet unless this downside revision is viewed as drastic (putting back timing for a rate hike). Buying sterling dips seen as the best course of action. UK jobs data expected to show further improvement with earnings again to be in focus. Cable support $1.6800, $1.6787-80 (50%-61.8% $1.6757-1.6817). Resistance $1.6820-30.
