A returning London market saw cable...>

EURO-STERLING: A returning London market saw cable benefit from an improved risk

outlook, as US equities continued to advance on the back of the global easing in

COVID-19 lock down measures. The move up in cable outpaced EUR/USD as short

positions were squeezed, in turn saw EUR/GBP ease back below its key technical

10-dma level at Gbp0.8921, trading to a low of Gbp0.8881 before edging back

above Gbp0.8900, though this late recovery was seen meeting headwinds on

approach to Gbp0.8910. Wednesday trade will be watched for any European

sovereign demand interest in the cross (often balances accounts for the

month-end value date), though traders aware that early month-end models are

suggesting USD sales (which should benefit cable) which could provide a counter

if interest emerges. 

- Whilst rate holds below its 10-dma its keeps a bearish tone in place, as well

as exposing the base of its 1.0% 10-dma envelope, currently at Gbp0.8832. A

clear break back above to relieve this pressure and in turn expose the topside

of the 1.0% envelope, currently at Gbp0.9011.