The pair closed in NY Monday at $1.6788 after rate had slowly recovered off its Friday lows of $1.6767 to $1.6796 through Monday. However, failure to move back above $1.6800 left rate prone to another squeeze lower with Asia obliging. Cable touched an early high of $1.6790 in opening Asian trade before sellers appeared that pressed rate down to retest Monday lows at $1.6770. Initial rejection saw rate back at $1.6778 before another wave of sales extended the move through Friday’s low to $1.6759 with rate holding heavy into Europe. Move is seen dollar driven as rate has moved lower in tandem with euro-dollar, whilst euro-sterling was contained within a range of stg0.7970/79. The cross appears to be supported by decent demand interest at the stg0.7970, the level having kept the rate buoyed through Monday and sparked suggestions that bid interest was linked to an M&A deal. Next support in cable seen into $1.6750, a break here to expose the Jun11 low at $1.6738. Resistance remains between $1.6790/1.6800. The cross currently hooding stg0.7970/0.8000, a break of either side to provide next directional impetus. A light domestic calendar for todaywith focus on Wednesday UK jobs/earnings report and the BOE Inflation Report.
