The pair closed in NY Monday at $1.6579 after rate drifted off a recovery high of $1.6599, having seen an opening low of $1.6501 in Asia. This dollar correction continued into Tuesday trade in Asia with cable extending its corrective pullback to $1.6566 before a strong sell off in dollar-yen prompted a bounce. Cable rallied back to $1.6595, settling above $1.6590 ahead of the European open. Euro-sterling consolidated between stg0.79555-0.7961 in Asia (most moves overnight were dollar led) having seen lows Monday of stg0.7952. Short euro-sterling remains a favoured trade though traders are warning that this play looks ‘crowded’ and could be open to a short squeeze, though any rally back above stg0.8000 likely to attract fresh selling. Cable seen needing to break above $1.6600/10 to boost recovery hopes, while below seen keeping downside in view. BBA house loans data at 0830GMT provides the domestic interest for a returning UK market, with main interest to switch to US durable goods early afternoon. Cable offers remain at $1.6600/10, a break to open a movetoward $1.6640/50. Support $1.6560/50 ahead of $1.6538 (61.8% $1.6501-99).
