A calming in the recent risk on rally, with...>

CABLE: A calming in the recent risk on rally, with currency markets taking their

lead from equities, allowed cable to extend its corrective pullback away from

Wednesday's high of $1.2615 to $1.2501 during Thursday's European morning trade,

but had edged back to $1.2544 ahead of the ECB announcement. Positive reaction

to the extra E600bln in asset purchases, as well as extending the duration of

purchases well into 2021, saw the EUR rally hard taking cable with it, though

with EUR/GBP also feeling the effect of the strong EUR, it provided some braking

though rate was able to push above yesterday's high to $1.2626 before momentum

faded and it eased to $1.2580, meeting support at the initial ECB react high.

Into the NY afternoon and cable has edged back above $1.2600. 

- Support $1.2580, $1.2550/40, $1.2500. Resistance $1.2626, $1.2633(line through

Apr14 high, Apr30 high) ahead of $1.2643/48. EUR/GBP above its 10-dma buoys the

cross, exposes topside of its 1.0% 10-dma, Gbp0.9040. 

- Large stimulus packages, along with an easing of COVID-19 lock downs, support

underlying positive risk outlook, but upcoming US election has the potential to

provide a counter.