Despite a slight gain in the headline CPI number to 1.3%, GBP/USD remained in narrow European range trade on Tuesday. As the pair made a series of higher highs it stalled ahead of $1.5680 and started to drift lower. A short squeeze in euro-sterling through stg0.8000 and on to extended highs of stg0.8020 added further weight as cable closed the NY session at fresh lows of $1.5630. Cable found support in early Asia with a move to $1.5633, before strong US dollar demand prevailed to pressure the pair. Initially stalling around $1.5610, dollar-yen took out Y117.25 barrier interest to briefly take the rate under $1.5600. The dip attracted fresh demand interest with a late move to $1.5615, however bounces remain shallow amid choppy markets. On the order board stops are noted on a break of $1.5590, opening a deeper move towards bids/stops protecting the $1.5550 barrier. Euro-sterling remained in consolidation mode and with trade tied to a narrow stg0.8016-23 range, held firm during the session. The 200-day ma provides key tech resistance at stg0.8054, a break opens offers on approach to stg0.8070. Focus turns to the BOE minutes at 0930GMT today where traders are not expecting any major changes from last week’s QIR.
