The pair closed in NY Thursday at $1.5256 after rate had been able to recover off session lows of $1.5201 to $1.5266 before drifting off into the close. Early trade in Asia was contained within $1.5250/65, dipped to $1.5242 before picking up fresh demand that lifted it up to $1.5275 (76.4% $1.5298-201). Rate eased off to $1.5261 before settling around $1.5270 into Europe. Euro-sterling, which had been pressured to extended recovery highs of stg0.8560 in NY, consolidated this move between stg0.85435/0.85635 in Asia, trading around stg0.8555 into Europe. End month flows, as well as knock on effects from Thursday’s release of disappointing UK data (Q1 GDP y/y revised lower, household income lower prompting suggestions that there is room for increased QE), continue to keep the negative weight on sterling. However, Morgan Stanley’s end month flow call, based on equities and bonds, has suggested decent demand for cable to be expected at today’s fixes. Resistance remains at $1.5275, a break to open a move toward $1.5295/00. Support remains into $1.5240, more on approach to $1.5200 with $1.5185 seen key, the level corresponding to a 76.4% retrace of the move up from $1.5009 to $1.5753 and 61.8% of $1.4832 to $1.5752.
