The pair closed in NY Thursday at $1.5407 after rate had been pressed to extended lows of $1.5395 (off earlier intraday highs of $1.5554) following the strong dollar demand prompted by release of stronger than forecast US core CPI. Sales in euro-dollar led the move lower, allowing euro-sterling to extend its lows to stg0.7262, the cross closing the day at stg0.7268. End month signals suggest strong dollar sales to be seen, and with this in mind market was caught wrong footed by the sharp dollar recovery with most reports suggesting that traders were not fully positioned for the move lower. This leaves downside in focus though most would be wary of selling cable at these low levels, preferring to fade rallies. Euro-sterling retaining a heavy feel should provide cable with some counter buoyancy in any further moves lower. A light data calendar in the UK today with attention set on further fall out from Thursday’s dollar move. End month flows, with position adjustments into the weekend will also be a determining factors in direction. Cable support seen at $1.5405-1.5395 (Asia-NY lows), a break to open a deeper move toward $1.5380/70 ahead of $1.5350. Resistance $1.5450 ($1.5449 38.2% $1.5537-1.5395) ahead of $1.5480/85.
