The pair opened at $1.6615 on Tuesday and after concerns were raised that the Scottish Independent referendum showed a narrowing of the NO votes, it remained under pressure. Despite the release of solid UK Construction PMI data cable took out the $1.6500 barrier, before second wave supply pressed to extended lows of $1.6472 around the NY close. Having consolidated above stg0.7900 in early dealings, euro-sterling saw sharp gains throughout the day to close at stg0.7972. Cable opened flat in Asia and with trade initially tied to a narrow $1.6463-73 range, topside gains were seen limited. The underlying tone remained heavy and as fresh dollar demand emerged cable took out the $1.6450 barrier, triggering stops on the move to extended session lows of $1.6445. The dip attracted fresh demand interest with a move to $1.6457, however bounces remained shallow amid thin trade. Demand is seen placed at $1.6420($1.6425/Feb12 low), stronger behind on approach to the $1.6400 barrier. Euro-sterling extended the slow grind to stg0.7979, before momentum stalled to sit in a narrow 10 pip range. Focus turns to release of UK Services PMI data at 0830GMT for direction.
